Why Domino’s Pizza, Inc. (NYSE: DPZ) stock is under pressure

Free $100 Forex No-Deposit Bonus

Domino’s Pizza, Inc. (NYSE: DPZ) stock lost 1.5% on 16th July, 2020 and continued its bearishness falling over 0.2% in the after-hours session of July 16th, 2020 (Source: Google finance) post second quarter of 2020 update. Even though the firm’s global retail sales rose 5.7% during the second quarter, international business posted same store sales results, of only 1.3% during the quarter. Moreover, lower international franchise revenues resulting from temporary store closures, coupled with negative impact of changes in FX hurt the performance to a certain extent. The U.S. same store sales rose 16.1% during the quarter driven by customer ordering behavior during the COVID-19 pandemic. However, Operating margin fell slightly to 38.8% from 39% in the prior year quarter on the back of investments made related to the COVID-19 pandemic, despite higher US franchise business and the positive impact of the sale of the New York stores to franchisees last year. Moreover, Company owned store margin fell on a yoy basis hurt by higher labor costs.

The firm’s second quarter net income rose $26.3 million or 28.5% over the prior year quarter. The second quarter diluted EPS rose 36.5% to $2.99 as compared to $2.19 in the prior year. Given the ongoing pandemic, 75% of the firm’s sales in the US are coming through digital channels. The firm continued to lead the broader restaurant industry with 37 straight quarters of positive US comparable sales and 106 consecutive quarters of positive international comps. The firm continues to increase its global store count as we opened 125 gross new stores and 84 net new stores in Q2.

As per the balance sheet highlights, the firm had over $248.0 million of unrestricted cash and cash equivalents with $4.17 billion in total debt. The group had $102.0 million of available borrowings under its $200.0 million variable funding notes, net of letters of credit issued of $40.0 million and borrowings outstanding of $58.0 million. Net cash provided by operating activities was $211.8 million during the two fiscal quarters of 2020. The Company invested $33.7 million in capital expenditures during the two fiscal quarters of 2020.

Copyright © 2020. All Rights Reserved. FXDailyReport.Com
Risk Warning: Trading CFDs is a high risk activity and you may lose more than your initial deposit. You should never invest money that you cannot afford to lose. FXDailyReport.com will not accept any liability for loss or damage as a result of reliance on the information contained within this website including data, quotes, charts and buy/sell signals. Please be fully informed regarding the risks and costs associated with trading the financial markets.