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Robust Comps Growth to Drive Domino's (DPZ) Q1 Earnings

Domino's Pizza, Inc. DPZ is scheduled to report first-quarter 2021 results on Apr 29, before the opening bell. In the last reported quarter, the company’s earnings missed the Zacks Consensus Estimate by 8.7%.

Q1 Expectations

The Zacks Consensus Estimate for first-quarter earnings is pegged at $2.94, indicating a decline from $3.07 reported in the year-ago quarter. Over the past seven days, earnings estimates have remained stable. The consensus mark for revenues stands at $978.6 million, suggesting an improvement of 12.1% from the prior-year quarter.

Factors to Note

The company’s first-quarter performance is likely to have benefited from robust U.S. and international comparable sales. Comps in the quarter to be reported may have gained from ticket growth. Notably, fourth-quarter fiscal 2020 marked the 108th consecutive quarter of positive same-store sales in its international business. Domestically, fourth-quarter fiscal 2020 marked the 39th consecutive quarter of positive same-store sales. Store expansion also bodes well for the company. The company inaugurated 388 (116 net U.S. stores and 272 net new international stores) net new stores globally during fourth-quarter fiscal 2020.

Meanwhile, the Zacks Consensus Estimate for domestic revenues from franchise advertising and supply chain is pegged at $109 million and $574 million, suggesting an improvement of 13.5% and 11.9%, respectively, from the year-ago reported figure. Moreover, domestic company-owned stores’ revenues are anticipated to witness a rise of 13.7% to $116 million. However, the Zacks Consensus Estimate for international franchise royalties and fees is pegged at $64 million, indicating growth of 10.3% from the prior-year quarter.

Moreover, increase in revenues in its U.S. franchise business might have contributed to the margin. In the fourth-quarter fiscal 2020, the company’s operating margin expanded 60 basis points (bps) year over year to 39.5%.

Dominos Pizza Inc Price and EPS Surprise

Dominos Pizza Inc price-eps-surprise | Dominos Pizza Inc Quote

What the Zacks Model Unveils

Our proven model predicts 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 +2.75%. 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 #3.

Other Stocks Poised to Beat Earnings Estimates

Here are some other stocks worth considering from the Zacks Retail-Wholesale space as our model shows that these too have the right combination of elements to beat on earnings this season:

Yum! Brands, Inc. YUM has a Zacks Rank #2 and an Earnings ESP of +3.67%.

Starbucks Corporation SBUX has a Zacks Rank #3 and an Earnings ESP of +7.42%.

Brinker International, Inc. EAT has a Zacks Rank #3 and an Earnings ESP of +8.37%.

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Dominos Pizza Inc (DPZ): Free Stock Analysis Report
Starbucks Corporation (SBUX): Free Stock Analysis Report
Brinker International, Inc. (EAT): Free Stock Analysis Report
Yum Brands, Inc. (YUM): Free Stock Analysis Report
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