How Does Domino's Earnings Stack Up?
Shares of Domino's Pizza (NYSE: DPZ) are down roughly 7% since reporting its Q1 earnings last week, showing what a challenging time it is for restaurants.
In a vacuum, Domino's results for the quarter were quite strong. The company reported fiscal first-quarter net income of $121.6 million resulting in earnings of $3.07 per share, while net sales rose 4.4% to $873.1 million. Both the EPS and sales numbers came in above analyst estimates and U.S. same-store sales also grew 7.1% on a year-over-year basis.
In the same quarter last year, net income was $92.6 million, or $2.20 per share. As for global sales, they also grew 4.4% in the first quarter, 5.9% if you exclude the impact of foreign currencies.
As for the international business, the first quarter was the 105th consecutive quarter of international same-store sales growth.
Still, Domino's appears to be better positioned than some of its main competitors.
Pizza Hut owners Yum! Brands (NYSE: YUM) reported Q1 EPS slightly below expectations with sales slightly above. However, same-store sales declined 7% for the period as a result of widespread store closures. Shares of YUM are mostly flat since its report.
Meanwhile, Starbucks (NASDAQ: SBUX) reported a mixed quarter as well, beating expectations on sales but missing on earnings. Comparable sales declined 10% overall. And though the company is reopening 95% of its stores in China, they said they expect the current quarter to be incrementally worse from a financial perspective. Shares of SBUX are down about 1% since its report was released.
The fact that all three of these major restaurant chains are trading down after their reports shows what a challenging environment it is. Investors can at least take solace in the fact that Domino's exceeded expectations across the board when compared to its peers. That should leave them in a better position when we get on the other side of this crisis.
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