Entrepreneurs

Robust Comps Growth Likely to Aid Domino’s (DPZ) Q3 Earnings

This story originally appeared on Zacks

Domino’s Pizza, Inc. DPZ is scheduled to report third-quarter 2021 results on Oct 14, before the opening bell. In the last reported quarter, the company’s earnings beat the Zacks Consensus Estimate by 9.1%.

– Zacks

Q3 Estimates

The Zacks Consensus Estimate for third-quarter earnings is pegged at $3.11, suggesting growth of 24.9% from the prior-year quarter. Over the past seven days, earnings estimates have been revised upward by 0.6%. The consensus mark for revenues stands at $1.03 billion, suggesting an improvement of 6.8% from the prior-year reported figure.

Factors to Note

The company’s third-quarter top line is likely to have been aided by robust international and domestic comparable sales. Ticket and order growth may have driven comps in the quarter to be reported. Second-quarter fiscal 2021 marked the 110th consecutive quarter of positive same-store sales in its international business.
Solid digital ordering system and higher global retail sales might have contributed to the third-quarter performance. Focus on robust international expansion bodes well. The company continues to witness growth in terms of its carryout and the delivery businesses. It has also been emphasizing on Car Side Delivery 2-Minute Guarantee with awareness campaigns.
The Zacks Consensus Estimate for domestic revenues from franchise advertising and supply chain is pegged at $115 million and $606 million, suggesting an improvement of 6.5% and 5.6%, respectively, from the year-ago reported figure. Domestic company-owned stores’ revenues are anticipated to be $117 million, indicating an improvement of 3.5% year over year. The Zacks Consensus Estimate for international franchise royalties and fees stands at $68 million, indicating growth of 23.6% from the prior-year quarter.
Increase in revenues in its U.S. franchise business might have contributed to the operating margin. In second-quarter fiscal 2021, the company’s operating margin expanded 70 basis points (bps) year over year to 39.5%.

Domino’s Pizza Inc Price and EPS Surprise

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for Domino’s this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.
Earnings ESP: Domino’s has an Earnings ESP of -0.06%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Domino’s carries a Zacks Rank #2.

Stocks Poised to Beat Estimates

Here are some stocks worth considering from the Zacks Retail-Wholesale space as our model shows that these have the right combination of elements to beat on earnings this season:
AutoNation, Inc. AN has an Earnings ESP of +2.45% and a Zacks Rank #1.
BJ’s Restaurants, Inc. BJRI has an Earnings ESP of +0.66% and a Zacks Rank #3.
Carvana Co. CVNA has an Earnings ESP of +91.62% and a Zacks Rank #3.

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BJ’s Restaurants, Inc. (BJRI): Free Stock Analysis Report
 
Domino’s Pizza Inc (DPZ): Free Stock Analysis Report
 
AutoNation, Inc. (AN): Free Stock Analysis Report
 
Carvana Co. (CVNA): Free Stock Analysis Report
 
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