FX.co ★ Domino's Pizza Backs Long-term Forecast, Suspends Global Net Store View; Stock Down In Pre-market

Domino's Pizza Inc. (DPZ) on Thursday reaffirmed its long-term annual growth outlook for the 2024-2028 period, following robust second-quarter results.

However, the world's largest pizza chain has put its global net store growth forecast on hold and revised its outlook for the International region due to challenges faced by Domino's Pizza Enterprises (DPE), one of its master franchisees.

In pre-market trading on the NYSE, Domino's Pizza shares fell by approximately 11.7%, dropping to $417.71.

The company now anticipates an annual global net store growth of 825 to 925 locations in 2024. In the U.S., they maintain an expectation of adding 175+ net stores annually from 2024 to 2028.

In the International region, Domino's projects it will fall short by 175 to 275 stores of its 2024 target of 925+ net stores, primarily due to difficulties in both openings and closures faced by DPE. The company is working closely with DPE to address these issues and will provide further updates once more clarity is obtained regarding its global net store growth numbers.

Furthermore, Domino's has temporarily suspended its guidance metric of 1,100+ global net stores until the complete impact of DPE’s store openings and closures on international net store growth is fully assessed.

For the 2024-2028 period, the company maintains its forecast of 7% annual global retail sales growth and 8% annual income from operations growth, excluding the impact of foreign currency fluctuations.

In the second quarter, Domino's Pizza reported increased earnings compared to the previous year, surpassing Wall Street expectations. The company's net profit rose to $141.98 million, or $4.03 per share, from $109.38 million, or $3.08 per share, in the same quarter last year.

Analysts had on average predicted earnings of $3.65 per share, according to data from Thomson Reuters. These analyst estimates typically exclude special items.

Quarterly revenue increased by 7.8%, reaching $1.10 billion, up from $1.02 billion the previous year.

On July 16, the Board of Directors declared a quarterly dividend of $1.51 per share for shareholders of record as of September 13, payable on September 30.