Domino's Q3 Earnings on Horizon: What to Expect From the Stock?

Core Viewpoint - Domino's Pizza, Inc. is set to report its third-quarter 2024 results on October 10, with expectations of a decline in earnings but growth in revenues compared to the previous year [1][2]. Group 1: Earnings and Revenue Estimates - The Zacks Consensus Estimate for earnings is $3.67 per share, reflecting a 12.2% decline from the same quarter last year [2]. - Revenue estimates are pegged at $1.10 billion, indicating a growth of 7.1% year-over-year [2]. Group 2: Factors Influencing Performance - The company's top line is expected to benefit from expansion efforts, same-store sales growth, and digital enhancements [3]. - The "Hungry for MORE" strategy, aimed at increasing transaction growth in delivery and carryout segments, is likely to positively impact revenues [3]. - New menu items, such as the New York Style Pizza, are anticipated to contribute to sales growth [3]. Group 3: International and Domestic Performance - Strong sales momentum in key markets like China and India is expected to drive revenue growth [4]. - U.S. company-owned store revenues are predicted to grow 7.8% year-over-year to $362.5 million, while supply-chain revenues are expected to rise 6.7% to $659.5 million [5]. Group 4: Cost Pressures and Margins - Earnings are anticipated to decline due to rising costs, particularly in labor and technology investments, with no expected cost leverage in 2024 [6]. - Higher general and administrative expenses, partly due to a worldwide rally event, are likely to negatively impact margins [6]. - The gross margin for the quarter is expected to be 38.7%, slightly down from 38.8% in the prior year [7]. Group 5: Earnings Prediction Model - The Zacks model predicts an earnings beat for Domino's, supported by a positive Earnings ESP of +0.26% and a Zacks Rank of 3 [8].