Domino's Pizza, Inc. (DPZ - Free Report) announced the opening of its first store in Kosovo at its capital Pristina. For this purpose, the company partnered with Anatron and ICSG, the master franchise in the Balkan region and the local franchisee for Kosovo.
The move further underscores Domino’s relentless global expansion efforts. The company currently operates in more than 85 markets worldwide. Driven by strong brand presence, Domino’s shares have surged 30.6%, outperforming the industry’s growth of 3.8%, in a year’s time.
International Expansion & Franchising — Major Growth Drivers
Since Domino’s earns a chunk of its revenues from outside the United States, the company remains committed to accelerate its presence in high-growth international markets to boost business. Meanwhile, the company’s international growth continues to be strong and diversified across markets, driven by exceptional unit-level economics. Domino’s opened 829 net new stores in international markets in 2017 and 79 net stores in the first quarter of 2018.
The recent restaurant opening in Pristina will further expand the company’s footprint in Southeastern Europe and strengthen its franchise relations. Domino’s has a wide franchise network, both domestically and internationally. By reducing its ownership of restaurants and focusing more on refranchising, the company minimizes capital requirements, thereby facilitating its earnings per share growth and ROE expansion. In addition, free cash flow continues to grow, thus allowing reinvestment for increasing brand recognition and shareholder return. Moreover, Domino’s is less affected by food inflation as a result of franchising compared to other pizza companies with global operations.
Domino’s is currently the world's largest pizza company. It remains focused on continual innovation and provides the best services to customers. By opening its latest store in Kosovo, Domino’s is aiming at expanding its customer base by providing distinguished pizza experiences. Apart from limited-time offers, the company is also launching several new products like bread twists that are expected to drive incremental sales.
Moreover, the company had earlier reaffirmed its three-to-five-year outlook, which hints at global retail sales improvement within 8-12%, and domestic and international comps growth of 3% and 6%, respectively. Subsequently, the Zacks Consensus Estimate for 2018 sales is pegged at $3.5 billion, suggesting 24.5% year-over-year growth.
Zacks Rank & Stocks to Consider
Domino’s currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the U.S. restaurant space include BJ’s Restaurants (BJRI - Free Report) , Dine Brands (DIN - Free Report) and Wingstop (WING - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
BJ’s Restaurants, Dine Brands and Wingstop’s earnings for 2018 are expected to grow 41.8%, 23.1% and 13.5%, respectively.
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