Oct 13, 2023

Domino’s Pizza released earnings on Thursday after a recent sell-off for the pizza chain’s stock.

Domino’s Pizza Could See Additional Weakness with Earnings

DPZ: Weekly Chart

DPZ shares on a weekly basis have fallen from resistance at $400, but that move didn’t test higher levels of previous resistance, hinting at weakness. We could see further lows if earnings disappoint.

Domino’s posted stronger-than-expected third-quarter earnings as higher prices and new delivery fees helped to offset a pullback in US sales over the hotter summer months.

Domino’s said its profits for the three months ending in September surged almost 50% from last year to $4.18 per share, blowing away Wall Street forecasts of around $3.30 per share. The total was exaggerated, however, by gains from its investment in China-based DPC Dash, which received a one-off tax boost.

Global revenues at the chain slipped by 3.8% to $1.03 billion, missing analysts’ estimates, as same-store sales in the US fell 0.6% amid easing demand over the unusually warm summer.

The months ahead should see 2023 sales easing, the company said, to “modestly below” the mid-point of the 4% to 8% growth outlook it has seen in recent years. 

“We continue to execute on our initiatives to drive sustainable growth in the US,” said CEO Russell Weiner. “Our ‘Summer of Service’ initiative and the hard work of our franchisees and team members have brought delivery times back to pre-pandemic levels.”

“Domino’s Rewards is engaging more customers, and our integration with Uber’s marketplace is on track,” he added. “We are ready and excited to deliver the incremental orders both programmes will bring in 2024 and beyond.”

Domino’s shares jumped on earnings but are still showing weakness on the weekly chart.

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