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Will Robust Comps Growth Drive Domino's (DPZ) Q3 Earnings?
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Domino's Pizza, Inc. (DPZ - Free Report) is scheduled to report third-quarter 2023 results on Oct 12. The company is likely to benefit from robust same store sales growth, unit expansion, new menu addition and strong digitalization. DPZ has exhibited a decent run in the past year, with the stock rising 17.8% and outperforming the industry’s 5.9% growth.
Comps Growth Likely to Continue in Q3
The company’s performance in the third quarter is likely to have been aided by robust comps growth. Our model predicts U.S. company-owned stores and international stores comps to increase 4% and 3.1%, respectively, in third-quarter 2023.
DPZ continues to benefit from strong carryout and delivery businesses. It has been focusing on Car Side Delivery 2-Minute Guarantee with awareness campaigns. During the first quarter of fiscal 2023, it initiated the roll out of electric vehicles for pizza delivery.
Apart from this, enhanced make-line and cut-table technology, and AI-enabled forecasting are being introduced for better matching of demand with capacity. The initiatives are likely to have aided the company’s revenues.
However, lower supply-chain revenues are likely to have marred the top line. Our model estimates supply-chain revenues to fall 3.3% year over year to $624.7 million.
An ease in inflationary pressure is likely to have aided DPZ’s margin. Our model projects U.S. company-owned stores and supply-chain cost of sales to decrease 23.6% and 4.5% year over year, respectively. We suggest gross margin in the quarter under review to be 39.4% compared with 35.7% reported in the prior-year quarter.
Click here to know how the company’s overall third-quarter performance is expected to be.
The Zacks Consensus Estimate for earnings is currently pegged at $3.29 per share, indicating 17.9% growth year over year. The consensus mark for revenues is pegged at $1.05 billion, suggesting a 1.6% year-over-year decline.
DPZ currently carries a Zacks Rank #3 (Hold).
Stocks to Consider
Here are some stocks worth considering from the Zacks Retail-Wholesale space as our model shows that these have the right combination of elements to beat on earnings this season.
MCD’s earnings beat the consensus mark in each of the trailing four quarters, the average beat being 9.5%. Earnings per share for the to-be-reported quarter are expected to increase 11.6% year over year.
Starbucks Corporation (SBUX - Free Report) has an Earnings ESP of +1.60% and a Zacks Rank #3.
SBUX’s earnings beat estimates in three of the last four quarters and missed once. It has a trailing four-quarter earnings surprise of 7.3%, on average.
Chipotle Mexican Grill, Inc. (CMG - Free Report) currently has an Earnings ESP of +0.37% and a Zacks Rank #3.
CMG’s earnings beat the consensus estimate in three of the last four quarters and missed once. It has a trailing four-quarter earnings surprise of 4.8%, on average. Earnings per share for the to-be-reported quarter are expected to rise 10% year over year.
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Will Robust Comps Growth Drive Domino's (DPZ) Q3 Earnings?
Domino's Pizza, Inc. (DPZ - Free Report) is scheduled to report third-quarter 2023 results on Oct 12. The company is likely to benefit from robust same store sales growth, unit expansion, new menu addition and strong digitalization. DPZ has exhibited a decent run in the past year, with the stock rising 17.8% and outperforming the industry’s 5.9% growth.
Comps Growth Likely to Continue in Q3
The company’s performance in the third quarter is likely to have been aided by robust comps growth. Our model predicts U.S. company-owned stores and international stores comps to increase 4% and 3.1%, respectively, in third-quarter 2023.
DPZ continues to benefit from strong carryout and delivery businesses. It has been focusing on Car Side Delivery 2-Minute Guarantee with awareness campaigns. During the first quarter of fiscal 2023, it initiated the roll out of electric vehicles for pizza delivery.
Apart from this, enhanced make-line and cut-table technology, and AI-enabled forecasting are being introduced for better matching of demand with capacity. The initiatives are likely to have aided the company’s revenues.
However, lower supply-chain revenues are likely to have marred the top line. Our model estimates supply-chain revenues to fall 3.3% year over year to $624.7 million.
An ease in inflationary pressure is likely to have aided DPZ’s margin. Our model projects U.S. company-owned stores and supply-chain cost of sales to decrease 23.6% and 4.5% year over year, respectively. We suggest gross margin in the quarter under review to be 39.4% compared with 35.7% reported in the prior-year quarter.
Click here to know how the company’s overall third-quarter performance is expected to be.
Domino's Pizza Inc Price and EPS Surprise
Domino's Pizza Inc price-eps-surprise | Domino's Pizza Inc Quote
Overall Q3 Earnings & Revenue Expectations
The Zacks Consensus Estimate for earnings is currently pegged at $3.29 per share, indicating 17.9% growth year over year. The consensus mark for revenues is pegged at $1.05 billion, suggesting a 1.6% year-over-year decline.
DPZ currently carries a Zacks Rank #3 (Hold).
Stocks to Consider
Here are some stocks worth considering from the Zacks Retail-Wholesale space as our model shows that these have the right combination of elements to beat on earnings this season.
McDonald's Corporation (MCD - Free Report) currently has an Earnings ESP of +1.11% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
MCD’s earnings beat the consensus mark in each of the trailing four quarters, the average beat being 9.5%. Earnings per share for the to-be-reported quarter are expected to increase 11.6% year over year.
Starbucks Corporation (SBUX - Free Report) has an Earnings ESP of +1.60% and a Zacks Rank #3.
SBUX’s earnings beat estimates in three of the last four quarters and missed once. It has a trailing four-quarter earnings surprise of 7.3%, on average.
Chipotle Mexican Grill, Inc. (CMG - Free Report) currently has an Earnings ESP of +0.37% and a Zacks Rank #3.
CMG’s earnings beat the consensus estimate in three of the last four quarters and missed once. It has a trailing four-quarter earnings surprise of 4.8%, on average. Earnings per share for the to-be-reported quarter are expected to rise 10% year over year.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.