Domino’s gains 25% in the stock market on Thursday ascribed to a largely upbeat earnings report

on Feb 21, 2020
Updated: Mar 11, 2020
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  • Domino’s gains 25% in the stock market on Thursday ascribed to a largely upbeat earnings report.
  • Domino's posts $1.15 billion in revenue in the fourth quarter versus $1.13 billion expected.
  • Domino's makes $3.13 of earnings per share in the fourth quarter versus $2.98 expected.

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Domino’s Pizza revealed significantly better than expected earnings and revenue as compared to the analysts’ estimates on Thursday. Despite fierce competition, the higher sales in the U.S, the company cited helped fuel its financial performance in the recent quarter. Following the earnings report, Domino’s was reported trading sharply higher in the stock market later in the day.

Domino’s Figures Versus Analysts’ Estimates

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Based on Refinitiv’s data, analysts had anticipated $1.13 billion in revenue for Domino’s in the fourth quarter. On the earnings front, they had expected it to make $2.98 per share in the recent quarter. In its quarterly performance results on Thursday, the American multinational pizza restaurant chain announced to have generated a higher $1.15 billion in revenue in Q4 while its EPS (earnings per share) was recorded at $3.13. At $1.15 billion, net sales saw a 6.3% increase in the fourth quarter.

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Net income attributable to the company in the fiscal fourth quarter was posted at $129.3 million. In the same quarter last year, the figure was capped at a much lower $111.6 million. According to the company, lower expenses (both general and administrative) and increased royalty revenue from its franchisees contributed the most to the higher net income in the recent quarter.

Domino’s also accentuated its same-store sales in the U.S to have reported a 3.4% growth in Q4 as compared to a much lower 2.3% expected by Wall Street. Owing to fierce competition from staunch rivals like DoorDash and UberEats, Domino’s delivery sales in the U.S currently face a strong challenge. The fourth quarter marked the first in around 2 years for Domino’s to print a sequential increase in its same-store sales in the home market. Same-store sales were noted to have improved by 2.4% in the previous quarter.

Domino’s International Same-Store Sales Fell Shy Of The Estimate

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International same-store sales, on the other hand, saw a 1.7% increase in the fourth quarter that came shy of the analysts’ estimate of 2.1%. Domino’s launched 141 new restaurants in the U.S in Q4.

The earnings report on Thursday sent Domino’s stock up by 25% later in the day. At the time of writing, the stock is exchanging hands at around $373 per share while it had started the new year at $293 in the stock market in January. In 2019, Domino’s performance was moderately upbeat with the company recording a little under 20% of annual growth.

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