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Domino’s Pizza earnings preview: Orders keep coming

Domino’s Pizza (DPZ) is expected to deliver a strong performance with an increase in earnings on higher revenues when it reports its second-quarter results on Thursday. Analysts are positive over the company’s earnings picture and the impact on its near-term stock price.

“While we are maintaining our 2Q20 domestic systemwide same-store sales estimate of 14.1%, we are raising our third-quarter 2020 same-store sales forecast to 8.0% from 5.9%, as we believe the brand will continue to benefit from pandemic-related changes in consumer purchasing behavior,” updates analyst Peter Saleh.

The share pice of Domino’s Pizza, led by chief executive Richard Allison (pictured)  has been a particularly positive performer in 2020. In the first half of 2020, the pizza chain operator’s shares rose by 30% compared to a decline of ~12% for the S&P/ASX 200 Index (ASX: XJO) over the same period.

Since then the Domino’s share price has continued to rise, hitting a record high of $75.00 last week.

This pizza chain is expected to post second-quarter earnings of $2.24 per share in its upcoming report, which represents a year-over-year change of +2.3%.

The consensus earnings per share estimate for the quarter has been revised 1.42% higher over the last 30 days to the current level.

Domino's Pizza shares chart

The earnings report, which is expected to be released on 16 July, 2020, can help the stock move even higher if key numbers are better than expectations. Throughout the worldwide pandemic-caused lockdown, Domino’s Pizza has managed to retain its strong sales performance. Sales in Japan were particularly strong according to management.

Despite the chain’s French and New Zealand stores closing for a period during the pandemic, the brand demonstrated strong first-half performance. These numbers appear to have positioned Domino’s among the few companies on the ASX 200 that will deliver a solid full-year result in August.

This, in combination with management’s plan to target new store openings of 7% to 9% per annum and same-store sales growth of 3% to 6% per year over the next five years, is sufficient to underpin solid earnings growth over the period and could drive the Domino’s Pizza share price notably higher.

As a compelling earnings-beat candidate, Domino’s presents a good opportunity for investors to invest in the company’s stock, using some of the best trading apps available on the market or open an account with a stock broker.

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Galina Mikova

Galina is a Hubspot-certified Technical Writer with over 10 years of experience in working with Fortune 500, private investment, banking, FOREX and niche tech companies as well as crypto and blockchain startups. She has a solid background in FinTech and blockchain technology.