A month has gone by since the last earnings report for Domino's Pizza (DPZ Quick QuoteDPZ - Free Report) . Shares have added about 8.2% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Domino's Pizza due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Domino's Q4 Earnings Beat, Revenues Miss Estimates

Domino's reported mixed fourth-quarter fiscal 2023 results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. However, both metrics increased year over year.

Earnings & Revenue Discussion

In the quarter, Domino's reported adjusted earnings per share (EPS) of $4.48, surpassing the Zacks Consensus Estimate of $4.37. The figure rose 1.1% from $4.43 reported in the year-ago quarter.

Revenues of $1,403 million missed the consensus mark of $1,416 million, but increased 0.8% on a year-over-year basis. The upside can be attributed to higher global franchise royalties and fees owing to global retail sales growth (excluding foreign currency impact) as well as higher supply-chain revenues. However, the increase was partially overshadowed by a decrease in U.S. franchise advertising revenues.

In fourth-quarter fiscal 2023, Domino's had 431 gross store openings and 37 gross store closures.

Other Metrics

Global retail sales (excluding foreign currency impact) rose 4.9% on a year-over-year basis in the fiscal fourth quarter. The upside was driven by higher international store sales (up 5.2% year over year). Meanwhile, U.S. store sales increased 4.5% year over year.

For the fiscal fourth quarter, comps at Domino’s domestic stores (including company-owned and franchise stores) rose 2.8% year over year. Our model predicted the metric to increase 1.1% from the year-ago levels.

At domestic company-owned stores, Domino’s comps gained 5.9% year over year compared with 3.4% a year ago. We estimated the metric to increase 2.9%.

Domestic franchise store comps jumped 2.6% year over year compared with 0.8% in the prior-year quarter. Our model suggested the metric to increase 1%.

Comps at international stores, excluding foreign currency translation, improved 0.1% year over year compared with 2.6% in the prior-year quarter.

Margins

In the fiscal fourth quarter, Domino’s gross margin expanded 160 basis points (bps) year over year to 38.4%.

Net income margin was 11.2%, down 20 bps from the year-ago quarter. Our estimate was pegged at 10.6%.

Balance Sheet

As of Dec 31, 2023, cash and cash equivalents totaled $114.1 million compared with $60.4 million as of Jan 1, 2023. Long-term debt (less current portion) at the fiscal fourth-quarter end was $4,934.1 million compared with $4,967.4 million at the end of Jan 1, 2023. Inventory amounted to $83 million compared with $81.6 million at the end of Jan 1, 2023.

Capital expenditure in the quarter totaled $105.4 million compared with $87.2 million as of Jan 1, 2023

During fiscal fourth quarter, the company repurchased and retired 167,572 shares for an aggregated cost of $58.2 million. As of Dec 31, 2023, DPZ stated the availability of $141.3 million under its repurchase program.

Management declared a 25% increase in cash dividend to $1.51 per share. The dividend will be paid on Mar 29, 2024, to shareholders of record as of Mar 15, 2024.

Long-Term Guidance (2024-2028)

The company expects more than 7% annual global retail sales growth. It anticipates more than 1,100 annual global net store growth. DPZ expects more than 8% annual income from operation growth.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in fresh estimates.

VGM Scores

At this time, Domino's Pizza has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Domino's Pizza has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Domino's Pizza belongs to the Zacks Retail - Restaurants industry. Another stock from the same industry, Restaurant Brands (QSR Quick QuoteQSR - Free Report) , has gained 4.2% over the past month. More than a month has passed since the company reported results for the quarter ended December 2023.

Restaurant Brands International reported revenues of $1.82 billion in the last reported quarter, representing a year-over-year change of +7.8%. EPS of $0.75 for the same period compares with $0.72 a year ago.

Restaurant Brands International is expected to post earnings of $0.73 per share for the current quarter, representing a year-over-year change of -2.7%. Over the last 30 days, the Zacks Consensus Estimate has changed +0.9%.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Restaurant Brands International. Also, the stock has a VGM Score of C.