- Stephen & Co Analyst Joshua Long reiterated an equal weight rating on shares of Domino’s Pizza, Inc. DPZ with a Price target of $300.
- The analyst’s latest reviews suggest that Domino’s 1Q23 sales trends were helped by a successful Boost week and a better-than-expected initial launch of the Loaded Tots platform.
- The analyst noted that Domino’s is a leader in the US pizza industry and is estimated to be responsible for supplying about a third of all pizzas in the US
- This leadership position is also reflected in the fact that approximately 60% of Domino’s domestic sales are generated through the delivery channel.
- In FY22, Domino’s shipment sales were more than $500 million above pre-pandemic levels but were down 6.6% (6.6%). comparable sales basis compared to the previous year.
- The analyst clarified that the negative comparison reflects the increasing challenges of the broader macroeconomic environment for the company’s relatively more price-conscious consumers, along with the ongoing normalization of sales trends by distribution channel.
- Using the company’s corporate stores as a benchmark, the analyst is encouraged to hear that staffing has improved across all positions.
- The analyst noted that Domino’s U.S. carryout business accounts for about 40% of sales and can serve as a highly incremental channel over time to complement the company’s core delivery business.
- Despite recent headwinds from food and labor inflation, the analyst believes the unit-level economics of Domino’s business remain compelling.
- Although Equal-Weight rates DPZ stocks, the analyst maintains a positive bias on the long-term potential of the Domino’s brand given its category leadership, company size and size, and consumer loyalty to the brand.
- price action: DPZ shares trade 0.03% lower at $315.32 on the last check Friday.
- Photo via company
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