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Domino’s shares surge after topping earnings estimates

By Lawrence Gash

Pizza firm sees its share price reaching an all-time high

Dominos surges after topping earnings estimates

Domino’s Pizza Enterprises (DPZ) saw its share price surge 25 per cent on Thursday to an all-time high of $381 after reporting better-than-expected earnings.

The company closed at $373 and has fallen 1.75 per cent in mid-morning US trading on Friday to stand at $367.19.

Domino’s Pizza reported fourth quarter revenue of $1.15bn (£890m, €1bn), a 6.5 per cent increase on the same period a year before and $20m more than analysts had predicted. Healthy comparable sales growth in the United States and an improved operating margin helped the company’s bottom line. Analyst forecasts of earnings-per-share of $2.97 were 15 cents off the mark.

Domino’s ability to sustain growth and overall performance has attracted investors over the years. At the end of 2019 some were surprised to discover that alongside technological trailblazers Netflix, Amazon and Tesla, Domino’s Pizza was one of the decade's best-performing stocks. Its share price outperformed Google and rose more than 2,000 per cent.

The company looks set to continue this performance for the next decade, with its share price gaining 24.97 per cent since January 2, Domino’s now has a market capitalisation of $15.26bn.

Domino’s CEO Rich Allison said: “As I look ahead to 2020 in the US business, I’d like to highlight a few areas of focus for us. First, we’re going to continue to fortress our markets. Our strong four-wall and enterprise profitability for franchisees should continue to position them well for continued growth.”

To further attract investors Domino’s has bolstered its quarterly dividend payout by 20 per cent to $0.78 per share from $0.65. And while an annual payout of $3.12 and a dividend yield of $0.84 per cent is by no means huge, the recent increase coupled with a generous share buyback programme will continue to attract investors.

FURTHER READING: THE DECADE IN REVIEW: Patrick Industries is best performing stock of decade

FURTHER READING: Pizza Express owner to inject £80 million to reduce vast debt

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