Despite Positive Second Quarter Earnings, Domino’s Pizza Inc.’s Stock Tumbles

Pizza

Although Domino’s Pizza Inc. (NYSE:$DPZ) released strong second-quarter earnings, the market has reacted somewhat negatively to the company. Despite surpassing analysts’ expectations in earnings and seeing continuously strong sales, Domino’s Pizza Inc.’s stock declined as much as 9.24% during the morning of July 25.

Before the market opened on July 25, Domino’s announced its second-quarter reports. The popular restaurant chain saw earnings of $1.32 per share with a revenue of $628.6 million. This beat analysts’ expectations of earnings of $1.23 per share with a revenue of $610 million. Adding on to strong earnings, Domino’s also saw U.S. sales rise by 9.5% this quarter after opening 39 new restaurants in the U.S.

“Our U.S. results continue to amaze me,” Domino’s CEO Patrick Doyle noted during the company’s second-quarter earnings call. “It refuses to level off or become complacent. We’ve never been more aligned as a domestic system. Our domestic business is getting it done to say the least.”

However, Domino’s U.K. sales were not as successful. Same-store sales rose by only about 2.6% internationally largely due to poor European reception. Doyle reassured analysts and investors during the earnings call that the company was aware of concerns over European sales and that the problems are fixable.

Besides its earnings report, Domino’s also announced that they will be opening another supply chain center – its 17th – in 2018. Additionally, the company is releasing new flavours – garlic, parmesan, and cinnamon – for its “bread twists”.

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About the author: Grace is currently studying at UBC to achieve her BA in Computer Science. She is due to graduate in 2020. As a content creator, Grace has written financial analysis, stock market news, and informational investing articles. She also worked as an editor with her university publication 'UBC Undergraduate Journal of Art History'.