Domino’s Pizza just served up a 7.1% revenue and 30.8% earnings gain

During the pandemic, Domino’s Pizza implemented savvy strategies to support its business. It’s now well-positioned to capitalize on its popular offerings to keep attracting customers.

It continues to add business in rapidly growing international markets while continuously innovating its menu offerings to attract new customers while retaining existing ones.

The stock trades at 26.2 times the company’s 2024 earnings forecast, a number we feel is justified thanks to its expanding global presence.

DOMINO’S PIZZA (New York symbol DPZ; www.dominos.com) gives you exposure to the world’s largest chain of pizza stores offering takeout and delivery. The company (symbol DPZ on New York) operates 20,930 outlets, in the U.S. and 85 other countries. Franchisees run most of these stores.

In the three months ended June 16, 2024, the company’s sales rose 7.1%, to $1.10 billion from $1.02 billion a year earlier. Same-store sales rose 4.8% in the U.S., while they rose 2.1% internationally. Excluding one-time items, earnings per share rose 30.8%, to $4.03 from $3.08.

Thanks to its strong global brand recognition, Domino’s can raise its prices to offset higher costs.

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Growth Stocks: Digital tech should keep powering further gains at Domino’s Pizza

Domino’s also continues to invest in its own delivery and takeout systems and technology. Those include the development of a robust digital ordering system and loyalty programs. These initiatives have been contributing to traffic gains and should enhance service speed, accuracy, and efficiency. For instance, the company has installed GPS-enabled order tracking in the U.S. and is building more stores to cut down on delivery times.

All in all, the pandemic was a boon for top pizza chains like Domino’s as consumers avoided public spaces and instead opted for delivery and curbside pickup. That boosted Domino’s, which was already outpacing rivals given its commitment to tech-enabled carry-out and delivery. Meantime, those moves are still paying off.

Domino’s raised its quarterly dividend by 24.8% with the March 2024 payment, to $1.51 from $1.21. The shares now yield 1.4%.

All this bodes well for Domino’s profits—and future share price gains for investors.

Recommendation in Power Growth Investor: Domino’s Pizza is a buy.

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Scott Clayton

Scott is an associate editor at TSI Network. He is the lead reporter and analyst for Dividend Advisor, Power Growth Investor and Canadian Wealth Advisor and a member of the Investment Planning Committee. Scott began his investment and financial career working with Pat McKeough at The Investment Reporter in the 1980s. Subsequently, he worked at the Financial Post Corporation Service for 10 years. He joined TSI Network in 1998. He is a Bachelor of Economics graduate of York University, and he also has an M.B.A. from the Schulich School of Business.

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