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Will Solid Domestic Sales Boost Domino's (DPZ) Q2 Earnings?

Zacks Equity Research

Domino's Pizza, Inc. DPZ is scheduled to report second-quarter 2019 earnings on Jul 16, before market open. In the last reported quarter, the company’s earnings surpassed the Zacks Consensus Estimate by 6.3%. Also, in three of the trailing four quarters, the bottom line outpaced the consensus mark, the average beat being 5.7%.

Q2 Expectations

The Zacks Consensus Estimate for second-quarter earnings is pegged at $2.00, above $1.84 reported in the year-ago quarter. Over the past 30 days, the company’s earnings estimates have inched up 0.5%. In first-quarter 2019, Domino's posted 10% bottom-line growth year over year.

For quarterly revenues, the consensus mark stands at nearly $836.3 million, indicating a 7.3% improvement from the prior-year quarter reported number.

Let’s delve deeper to find out how the company’s top and bottom line will shape up this earnings season.

Factors at Play

Domino's robust International and Domestic revenues are expected to boost its second-quarter 2019 results. The Zacks Consensus Estimate for International revenues is pegged at $55 million, suggesting 7.8% growth from the year-earlier quarter's reported figure. Moreover, revenues from franchise and supply chain are pegged at $97 million and $483 million, implying 11.5% and 9.5% improvement from the year-ago reported number. However, domestic company-owned stores’ revenues are likely to witness a marginal decline of 0.8% to $118 million.

For same-store sales at Domino’s domestic stores (including company-owned and franchise stores), the consensus mark is likely to move 4% north, above 3.9% recorded in first-quarter 2019. At domestic company-owned stores, the same is expected to increase 3.3%, below 3.9% registered in the year-ago quarter.

Notably, the first quarter marked the 32nd consecutive quarter of positive U.S. comparable sales and 101st consecutive quarter of positive international comps.

However, negative currency translation along with a tricky consumer spending environment in the U.S. restaurant space remain potent headwinds for the company.

Domino's Pizza Inc Price and EPS Surprise

Domino's Pizza Inc Price and EPS Surprise

Domino's Pizza Inc price-eps-surprise | Domino's Pizza Inc Quote

What Does the Zacks Model Unveil?

Our proven model shows that Domino's is likely to beat earnings estimates in the second quarter. This is because a stock needs to have both — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — for this to happen. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Domino's Earnings ESP of +0.33% and a Zacks Rank #3 make us reasonably confident of an earnings beat.  You can see the complete list of today’s Zacks #1 Rank stocks here .

Stock With Favorable Combinations

Here are a few other stocks from the Restaurant space that investors may consider as our model shows that they have the right combination of elements to post an earnings beat in the upcoming releases:

Chipotle Mexican Grill, Inc. CMG has a Zacks Rank #1 and an Earnings ESP of +7.34%. The company is scheduled to report quarterly numbers on Jul 23.

Del Frisco's Restaurant Group, Inc. DFRG has an Earnings ESP of +100.00% and a Zacks Rank #2.

McDonald's Corporation MCD has an Earnings ESP of +0.48% and a Zacks Rank #3.

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McDonald's Corporation (MCD) : Free Stock Analysis Report

Domino's Pizza Inc (DPZ) : Free Stock Analysis Report

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