Domino’s Pizza Q3 Earnings Report: Revenue Misses, Earnings BeatDomino's Pizza Inc. (NYSE: NYSE:DPZ ), the largest pizza chain globally, has released its Q3 2024 financial results, revealing a mixed performance that left investors somewhat disappointed. Despite beating analyst expectations on earnings, Domino’s missed revenue estimates, causing the stock to slip. The company remains focused on its "Hungry for MORE" strategy, but the latest report underscores the challenges Domino's is facing in a pressured global marketplace.
Fundamental Overview
In Q3, Domino’s reported adjusted earnings per share (EPS) of $4.19, exceeding analyst projections of $3.63 by a significant margin. This 15.2% earnings beat reflects the strength of Domino's operations, particularly its cost management and international growth. However, revenue came in at $1.08 billion, falling short of Wall Street’s $1.1 billion estimate. This revenue miss highlights the broader industry challenges, particularly a competitive market and shifts in consumer spending.
Key Financial Metrics:
- Revenue: $1.08 billion (5.1% YoY growth, but 1.6% below expectations)
- EPS: $4.19, beating the $3.63 consensus
- Global Retail Sales Growth: 5.1% YoY, excluding currency impacts
- Same-Store Sales: U.S. up 3.0%, International up 0.8%
- Operating Income Growth: 5.7%, excluding FX impacts
- Net Store Growth: 72 new locations globally in Q3
While the growth in same-store sales and net store expansion demonstrates Domino’s resilience, the revenue shortfall suggests there may be limitations to growth in a highly competitive fast-food market. Additionally, rising operating costs and fluctuations in foreign exchange rates have impacted Domino’s international operations.
2024 Guidance and Future Outlook
Domino’s maintained its full-year 2024 guidance, projecting approximately 6% global retail sales growth and 8% growth in operating income. These targets align with the company’s consistent expansion strategy, which includes adding 800 to 850 new stores globally by year’s end. For 2025, the company expects sales and income growth to be broadly in line with 2024 projections, signaling confidence in its long-term strategy.
However, the revenue miss, combined with the challenges of maintaining growth in mature markets like the U.S., has caused some investors to reassess Domino’s trajectory. Domino’s already boasts 21,002 locations globally, making incremental growth more challenging.
Technical Outlook
From a technical perspective, Domino’s stock has entered a bearish zone following the release of its Q3 earnings. As of the time of writing, NYSE:DPZ has dropped 2.52%, with the Relative Strength Index (RSI) sitting at 35, approaching the oversold region. This signals that the stock could be nearing a critical support level but is not yet undervalued enough for a bullish reversal.
Key technical indicators point to further weakness:
All major moving averages depict a bearish tone, with the stock trading below its 50-day and 200-day moving averages. This suggests downward momentum in the short to medium term.
The daily price chart shows a gap-down pattern that has yet to be filled, creating a technical overhang that could pressure the stock further.
NYSE:DPZ is also trading within a falling wedge channel, a pattern often associated with continued downward momentum until a breakout occurs. A dip towards the $355 pivot could lead to a significant selloff, potentially triggering a broader decline if support levels fail to hold.
If Domino's stock fails to find support at current levels, it could face further downside, especially given the broader headwinds in the fast-food sector, including inflationary pressures and changing consumer preferences.
Conclusion
While Domino's continues to execute its growth strategy effectively, as evidenced by strong EPS growth and net store expansion, the revenue miss in Q3 signals challenges ahead. The stock's current technical outlook suggests caution is warranted, particularly as NYSE:DPZ nears critical support levels. Investors should watch for a potential bounce if the stock hits oversold territory, but the risk of further downside looms if the broader market sentiment remains negative.
In the long term, Domino’s focus on expansion and operational improvements may help it navigate current headwinds, but short-term technical signals and the revenue shortfall indicate that the stock could face more turbulence before recovering.
Dominospizzachart
Domino’s Pizza Stock Rises 4.73% on Earnings BeatDomino's Pizza ( NYSE:DPZ ) sizzles in the first quarter, serving up a mouthwatering performance that leaves investors craving for more. With a strategic blend of innovative initiatives and strategic partnerships, the world's largest pizza chain surpasses expectations, sending its shares soaring in early trading.
Loyalty Program and Uber Eats Partnership Drive Growth
The secret ingredients behind Domino's recipe for success? A revamped Domino's Rewards loyalty program and a lucrative partnership with Uber Eats. CEO Russell Weiner attributes the chain's stellar performance to the revamped loyalty program, which enticed customers with irresistible rewards. Moreover, Domino's foray into marketing on Uber Eats proved to be a game-changer, opening new avenues for sales growth. Weiner's bullish outlook suggests that Domino's anticipates ending the year with a significant uptick in sales, thanks to this strategic collaboration.
Impressive Financial Performance
Domino's earnings report leaves investors craving more, with diluted earnings per share soaring to $3.58, marking a remarkable 22.2% increase from the year-ago period. Revenue also witnessed a robust uptick, surging 5.9% year-over-year to $1.08 billion. These stellar figures not only exceed analyst estimates but also underscore Domino's unwavering dominance in the fiercely competitive pizza delivery market. With same-store sales up by an impressive 5.6%, Domino's solidifies its position as a leader in the industry, leaving competitors in the dust.
Expansion and Growth Projections
Domino's appetite for growth shows no signs of slowing down, as evidenced by the addition of 164 stores in the quarter, bringing its total store count to a whopping 20,755. The company remains steadfast in its commitment to expansion, reiterating its full-year guidance of sales growth exceeding 7% and the addition of 1,100 or more net stores. This bullish projection reflects Domino's confidence in its ability to capitalize on emerging opportunities and navigate challenges in the dynamic food delivery landscape.
Market Response and Future Outlook
Investors devour Domino's impressive performance, driving its shares up by 3.5% in early trading. The stock's remarkable ascent, gaining approximately one-quarter of its value since the start of 2024, underscores investor confidence in the company's growth trajectory and strategic initiatives. As Domino's continues to innovate and expand its footprint, the future looks promising for the pizza giant, with shareholders eagerly anticipating the next slice of success in its delectable journey.
Technical Outlook
Domino's Pizza stock ( NYSE:DPZ ) is trading high above the 200, 100, and 50-day Moving Average (MA) respectfully. Domino's Pizza stock ( NYSE:DPZ ) has a Relative Strength Index (RSI) of 70.80 creating further room for reaching the pivot point at $560.
Time to sell Domino's and buy yourself a chicken kebab.Almost 2 months ago, I created a post about this stock, which was a follow up on a previous post. In those posts, I made it clear (hopefully) that a reversal for the stock was comming.
Now I want to make a post where i say its time to sell the stock to take profits and close the swingtrade for those who took it.
I am still bullish on the stock market for the long term, so holding doesn't seem like a bad option IF you were early enough. But this is the point where I would sell.
What goes up comes downI am just not sure what has caused this extraordinary price drop, when apparently it was looking like it was just recovering from down trend - if anyone knows please comment .
May be it’s just natural price correction in market, looking at today’s price action, buyers were able to take it up in first two hours up to $125.84, till that time it’s was all buyers hardly any sellers but later it’s was all sellers and price couldn’t hold and closed below opening price altogether 18.40% down.
If this is just some weird correction without any fundamentals changing, then I think price should come down to round $105 range.
Keeping a watch on this stock, leaving my notes here for community discussion.
Please note it’s not a trading advise by any means, please do your own research.
Dimonos Pizza's Bullish DivergenceA couple of months ago, I posted an analysis of Domino's Pizza. At that moment, a double bottom was formed. At this moment, a slightly lower low was formed, creating a bullish divergence on the weekly rsi. We also spoke about the buy singal on the Fetch Buy And Hold Indicator , which was the first one since 2008
I was also talking about a sideways period for the stock. I would love to see it happen around these prices. This would cause Dominos Pizza to go sideways at the horizontal support level, while staying above the two support trend lines of the channel.
Basically, the stock is seeing two bullish signals on the weekly chart, at a great discount.
Dimonos Pizza's Amazing ChartWhat is so amazing about a chart that fell roughly 50% in 1 year?
What we're seeing right now is a textbook falling channel structure. In general a falling channel consists of 1 resistance line and 1 support line in which the price oscilates between.
There are 4 lines on my chart. I'd like to add an extra support and resistance line in order to create more clarity for short term trading. This basically creates a channel within a channel.
One other property of the channel is that the price oscilates down until it hits an important support. At that point the price goes sideways untill it breaks out of the channel.
Now intrestingly enough, DPZ created a double bottom. That double bottom fell at the support of the inner channel. This means that the last support hasn't been touched, indicating a new sideways period.
Lastly, the FETCH Buy And Hold Indicator fired off a buy singal at the first bottom. This is the first buy signal since the bottom of 2008.
Fore more information about the indicator, visit this page.
The Two Scenario's Of Domino's PizzaMy last two posts were about the SPX and AMD and their falling channels, which are my favorite patterns to trade.
They follow an easy concept: They stay in their channels, untill they go sideways on an important support level, preferibly on a bullish rsi on the daily or weekly chart. I spotted one on the DPZ weekly chart, so I had to make a post about it.
I can see two likely scenario's for this stock, both of which, are going down. The only difference is where they decide to go sideways.
The first scenario is indicated by the green arrow. The support zone is at 175-300usd. The second one, which is indicated by the orange arrow, finds its support at 220-240.
DPZ (Domino's Pizza) Short: Bearish divergence and upwicks #0003Weekly: Closed lower, after upwick, impulse is blue (meaning MACD-H ticking down). Latest top diverging with previous local top. Often times, the 2.5 ATR level is a turning point for tops.
Daily: A nice set of divergences, on MACD lines, MACD-Histogram, and EFI. Even there is a divergence on Stochastic RSI, as well as ATR lines, showing an ATR channel divergence (see the two purple arrows). .
We can also see 2 long upwicks, supporting the idea that bulls run out of steam and the selling pressure comes in, as these price levels are rejected, and end of day closes close to the open price.
The entry can be either here, but I will wait the market open first, to see how it opens. I will post a chart on how I think I can enter, on a shorter Timeframe
Stoploss will be place somere halfway the upwick of the previous candle, around 465,1
Entry: 457
Target 1: 444,1
Target 2: 439,1
SL: 465,1
R/R ratio: 1:1.6, 1:2.1
DOMINOS PIZZA LOOKS WEAK - IMPORTANT LEVELS
Targets: 331, 300, 375
Every pullback must be seen as an opportunity to sell.
Long should be opened only above 390.
Use appropriate quantity and risk-reward ratio.
Always use a stop loss.
Always risk a maximum of 1-2% of your capital.
P.S: This is NOT investment advice. This chart is meant for learning purposes only. This is my personal journal. Invest your capital at your own risk.