During the last half-year, Domino’s Pizza, Inc. (DPZ) shares have increased by 20.4% compared to a 2.8% fall in the industry. This increase was caused by strong worldwide expansion, strong comps growth, successful attempts to increase sales, creative menu options, and developments in digital technology.
Over the last thirty days, this Zacks Rank #3 (Hold) company’s earnings forecasts have increased by 0.5% to $14.48 per share. Nonetheless, difficulties with personnel and inflationary pressures continue to be obstacles.
As a means of improving its company, DPZ is unwavering in its resolve to increase its footprint in rapidly developing foreign markets. Because of outstanding unit-level economics, it has continued to see strong and diverse worldwide expansion in the meantime.
It successfully added 27 net new shops to its U.S. system during the third quarter of fiscal year, increasing its overall store count to 6,762 in the country. During the same time frame, the foreign market also added 190 net new shops. The trend in store growth is anticipated to be positive in the forthcoming year, even though DPZ expects its annual worldwide net store growth to either match or slightly fall below the low end of the five to seven percent two to three year view.
The business is benefiting from strong increase in comparable sales. Global retail sales (which include all franchise and company-owned units) increased 5.3% in the third quarter of the fiscal year compared to the previous year. Global net store growth and better international store sales (up 9.8% year over year) were the main drivers of the positive outcome.
US retail sales, meanwhile, increased by 1.7% on a yearly basis. In the absence of foreign exchange adjustments, worldwide retail sales rose 5.1% over the previous year.
Excluding foreign currency translation, comps for overseas retailers increased 3.3% in comparison to the previous year. The measure decreased 1.8% from the same quarter the previous year. According to our forecast, comps at US company-owned and franchise shops will be 2.9% and 1% for the fiscal fourth quarter, respectively, compared to 3.4% and 0.8% for the same period last year. Moreover, we anticipate that foreign comps would increase to 3.3% from 2.6% in the previous year.
Uber Technologies and Domino’s reached a global collaboration to boost sales. Thanks to this cooperation, customers in the United States may now order Domino’s goods via the Postmates and Uber Eats apps. Since implementing this endeavour integration, the organisation has noticed a significant increase in response.
There are 27 foreign markets where Domino’s and Uber Eats are similar. Domino’s thought that by working together, Uber Eats orders to 70% of its locations worldwide may rise. By the end of 2023, Domino’s anticipates that ordering via the Postmates and Uber Eats apps will be accessible nationally.
Concerns still exist over decreased supply-chain revenues (caused by a drop in market basket price and fewer order volumes) and lower revenues from company-owned stores in the United States. The business expects operational difficulties resulting from labour shortages and inflationary pressures to persist for some time.
Domino’s is still suffering from rising labour and material expenses due to inflation. A few markets have been presenting labour issues for the corporation.
Management saw a rise in general and administrative costs during the third quarter of the fiscal year, which was primarily caused by increasing labour costs and the unfavourable effects of fluctuations in foreign exchange rates. It predicts that there will be persistently high labour and food inflation for some time to come.