Why Domino's Pizza Stock Just Crashed 13%

Core Viewpoint - Domino's Pizza shares fell 13.5% despite strong earnings in Q2 2024, raising concerns about the stock's valuation and growth strategy [1][2]. Financial Performance - Total revenue increased by 7%, aligning with expectations, but same-store sales growth was only 4.8%, indicating reliance on new store openings for revenue [2][5]. - Quarterly net income rose by 30%, primarily due to a lower tax rate and changes in investment valuations, while operating profits increased by less than 1% [3][2]. - Earnings per share exceeded forecasts at $4.03, compared to the expected $3.65, despite only meeting sales targets [5]. Store Expansion Strategy - The company plans to open 925 new stores this year, down from an initial target of 1,100, and will slow global expansion plans [4]. - In the U.S., store openings will continue at approximately 175 per year, but overall growth will decelerate [4][7]. Investor Sentiment - Despite assurances of long-term sales growth of 7% and operating income growth of about 8%, investor confidence appears shaken due to the slowdown in new store openings [7]. - The stock is currently valued at 31 times earnings, leading to perceptions that it may be overpriced [8].