Domino’s revenue meets estimates in Q1

(NYSE: DPZ) announced its Q1 CY2024 results, meeting analysts’ expectations with revenue reaching $1.08 billion, up 5.9% compared to last year’s quarter. The company reported a GAAP profit of $3.58 per share, showing improvement from $2.93 per share in the corresponding quarter of the previous year.

Domino’s Q1 CY2024 Highlights

Revenue: $1.08 billion, slightly exceeding analyst estimates of $1.08 billion
EPS: $3.58, surpassing analyst estimates of $3.40 by 5.4%
Gross Margin (GAAP): 28.7%, up from 26.6% in the same quarter last year
Free Cash Flow: $103.3 million, a decrease of 15.8% from the previous quarter
Same-Store Sales: Increased by 5.6% year on year
Store Locations: 20,755 at quarter end, with a net addition of 747 over the last 12 months
Market Capitalization: $17.38 billion

Russell Weiner, CEO of Domino’s, expressed satisfaction with the results, highlighting that their first quarter performance showcased the effectiveness of their Hungry for MORE strategy, delivering increased sales, store expansion, and higher profits.
Domino’s, founded by two brothers in Michigan, is globally renowned for its innovative marketing and efficient delivery services.

Traditional Fast Food
Domino’s operates within the traditional fast-food sector, known for its quick service and affordable menu options. Despite its convenience, this sector faces challenges regarding perceptions of unhealthy food choices and lower-quality ingredients, particularly in light of consumers’ growing emphasis on health and wellness.

Sales Growth
As one of the industry’s major players, Domino’s benefits from a robust brand image, influencing consumer preferences and purchasing behavior. While the company’s annualized revenue growth rate of 5.4% over the past five years has been modest, its expansion efforts through new store openings and increased sales at existing locations have contributed to its market presence.

Future Outlook
Domino’s reported a 5.9% year-on-year revenue growth in the latest quarter, aligning with Wall Street’s expectations. Analysts project a 7.4% sales growth over the next 12 months, indicating an anticipated acceleration from the current performance.

Same-Store Sales
The company’s same-store sales, reflecting the year-on-year sales change in existing restaurants, serve as a vital metric for assessing organic growth and consumer demand. Despite consistent same-store sales growth averaging 1.5% over the past eight quarters, Domino’s performance has trailed behind the broader sector. However, with a positive trend in same-store sales and an expanding restaurant network, Domino’s continues to attract customers and drive sales.

In the latest quarter, Domino’s recorded a robust 5.6% year-on-year growth in same-store sales, signaling an acceleration from the previous year’s 2.4% increase.

Domino’s exceeded analysts’ revenue projections for the quarter, with EPS also surpassing Wall Street estimates. The company maintained its long-term guidance, reflecting a solid performance. Following the earnings report, the stock price increased by 4.3% and currently trades at $521.11 per share.
Investors evaluating Domino’s should consider factors such as valuation, business fundamentals, and recent quarterly performance before making investment decisions.