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Domino's (DPZ) Debuts in Czech Republic, Eyes Sales Growth

Zacks Equity Research

Domino's Pizza, Inc. DPZ continues to expand its footprint globally to gain market share. Recently, the company announced the opening of its first outlet in Czech Republic. The store launch was accomplished through a partnership with master franchisee Daufood Czech Republic S.R.O. With this, the company has expanded its presence to more than 85 markets globally.

Global retail pizza sales leader, Domino's, believes that the new store situated in Vinohrady area of Brno will provide customers hot, made-to-order pizza in-store or delivered to their doorstep. The company said that it plans to open its second stores in Brno's city center next year.

Joe Jordan, Domino's executive vice president of international, stated that "Establishing ourselves in the Czech Republic provides an excellent opportunity for our brand to continue its global momentum".

Strategic Expansion Bodes Well

Domino’s international growth continues to be strong and diversified across markets, courtesy of exceptional unit level economics. On the domestic and international front, the third quarter of 2019 marked the company’s 34th and 103rd consecutive quarter of positive same-store sales. These apart, Domino’s inaugurated 829 net new stores in international markets during 2017 and 1,058 net new stores last year.

Furthermore, many international franchisees are consistently generating robust returns. Apart from the established markets such as Canada, Japan, Italy, the U.K., Ireland, Switzerland and South Korea, the emerging markets like Brazil, China, Indonesia and Turkey have been delivering solid performances. Australia, Russia, New Zealand and Saudi Arabia are also gaining momentum.

Meanwhile, India remains a market with immense growth potential. In fact, Domino’s India is one of the fastest growing operations in its global system. Additionally, the company’s entry into Slovakia and Malta is proof of its ever-expanding base.

Backed by an expanding global brand presence, shares of Domino’s have surged 25.6% in the past three months against the industry’s 8.6% decline.

Zacks Rank & Key Picks

Domino’s has a Zacks Rank #3 (Hold). Some better-ranked stocks in the same space include Chuy's Holdings, Inc. CHUY, Chipotle Mexican Grill, Inc. CMG and Cracker Barrel Old Country Store, Inc. CBRL. While Chuy’s sports a Zacks Rank #1 (Strong Buy), Chipotle and Cracker Barrel carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank  stocks here.

Chuy’s, Chipotle and Cracker Barrel have an impressive long-term earnings growth rate of 17.5%, 19.6% and 10%, respectively.

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