Why Domino’s Pizza (DPZ) Stock Is Up 22% This Month

Have you ever wondered how the pizza business is doing in the stock market? Let’s take a look at Domino’s Pizza, a well-known pizza chain that has been making some interesting moves recently.

Key Points

1. Despite mixed quarter results, Domino’s Pizza shows underlying growth and improved margins, which have resulted in a higher share price.

2. The contraction caused by social distancing and declining volume influenced the drop in revenue compared to last year. However, the company is advancing efforts toward operational improvement and staffing, particularly in the international market.

3. Domino’s financial outlook for 2023 includes continuing capital returns and is predicted to continue growing. Although Domino’s is not classified as high-yielding, it’s seen as a steady payment with a growth outlook. The company also has an ongoing deal with Uber, which could result in outstanding growth in the coming years.

What’s Cooking at Domino’s?

Domino’s Pizza, Inc. (NYSE: DPZ) recently shared its financial results for the second quarter of 2023 and is up 22% for the month! The company showed a growth of 5.8% in global retail sales and a slight growth of 0.1% in U.S. same-store sales. What’s more, they opened 197 new stores! But, they also had to close 56 stores during the same period. Despite these closures, their earnings per share (EPS) increased by 9.2% to $3.08 compared to the same time last year.

But what does this all mean? Well, it shows that Domino’s is growing globally and making more money per share of stock. That’s good news for people who own Domino’s stock!

Topping Expectations

Domino’s Pizza did even better than Wall Street expected for its quarterly profit. They managed to lower their supply chain costs by nearly 6%, which helped them increase their gross margin to 39.5%. That’s a big jump from last year’s 36.3%!

But wait, there’s more! Domino’s also announced a partnership with Uber Eats. This means that customers can now order Domino’s Pizza from the Uber Eats app. This new partnership and reduced costs led to a 2% increase in the company’s shares.

However, not everything was pepperoni and cheese. Despite these gains, the demand for Domino’s Pizza was lower than expected because of high menu prices and delivery charges.

A Slice of Reality

Despite the positive news, Domino’s Pizza stock fell by nearly 4% after they announced their quarterly results. This is because they didn’t meet the expected earnings per share, even though they met revenue expectations.

Over the past month, the company’s shares have risen by about 15% and by 28% over the last 30 days. This increase was mainly due to their new partnership with Uber Technologies. However, the stock’s performance has been flat over the last three years, frustrating some investors.

Looking Ahead

The company’s finance chief expects some challenges in the delivery business in the next quarter. However, they are hopeful for some improvements with the rollout of an updated loyalty program in September and the benefits of the Uber partnership.

Why Should Investors Care?

  • Domino’s Pizza is showing signs of growth, which could lead to an increase in share prices.
  • The company is making efforts to improve its operations, especially in the international market.
  • Domino’s is expected to continue growing in 2023 and has a promising deal with Uber, which could result in significant growth in the coming years.

Investment Ideas

If you’re thinking about investing in Domino’s Pizza, here are a few things to consider:

  • Domino’s Pizza has shown steady growth and improved margins, which could lead to a higher share price.
  • The company is making efforts to improve its operations and expand its market, especially internationally.
  • Domino’s has a promising deal with Uber, which could result in significant growth in the coming years.

Investing always comes with risks, so it’s important to research and consider all your options. Happy investing!

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