The market continued to be impressed by the previous day’s convincing bottom-line beat.
One trading session after Domino’s Pizza (DPZ 5.12%) delivered its latest set of quarterly earnings figures, the company’s shares zoomed more than 5% higher on Friday. A clutch of pundits tracking the stock weighed in on those results, and investors chose to accept the more positive takes. That 5%-plus share price rise was far higher than the 0.8% advance of the S&P 500 across the day.
A powerful earnings beat
For its third quarter, Domino’s didn’t manage to move the needle much on key fundamentals. Total sales rose by less than 4% year over year to a shade below $4.4 billion. That was on the back of 3% growth in same-store sales in the company’s native U.S. and a 0.8% rise in international restaurants. Meanwhile, generally accepted accounting principles (GAAP) net income slipped by less than 1% over that stretch of time to slightly under $147 million, or $4.19 per share.
The pie slinger missed on the average analyst estimate of $1.1 billion for sales. However, it absolutely obliterated the mere $3.63 per share anticipated for bottom-line profitability.
Domino’s management reiterated the company’s existing full-year guidance, which calls for a 6% growth in sales compared to 2023 and an 8% increase in income from operations. It feels it will post similar growth figures in 2025.
A busy Friday for Domino’s analysts
Domino’s has many analysts tracking its fortunes, and by my count, nine of them cut their price targets on the stock. At the same time, though, two raised their targets, while Evercore ISI’s David Palmer went as far as to remove it from his firm’s tactical underperform list while reiterating his outperform (i.e., buy) recommendation. His peer Brian Harbour of Morgan Stanley was one of the price target raisers, lifting his to $520 per share from the preceding $515 and maintaining his overweight (buy) designation.
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Domino’s Pizza. The Motley Fool has a disclosure policy.
