Domino's Pizza: Lots To Like About This Serial Compounder (NYSE:DPZ
published 26.07.2020 17:12
The strong comparable sales momentum in 2Q20 was case in point, as DPZ increasingly looks to be a net beneficiary of COVID in the US, while maintaining a compelling long-term growth outlook across geographies.
Driving the top and bottom-lines was a surge in US comparable sales at 16.1%, offsetting a deceleration in International comps (1.3%).
Given overall US store comps came in at 16.1% for the quarter, this would imply that weeks nine to twelve were also trending at an implied ~20%.
Unlike its US business, the International segment has seen a more noticeable slowdown, with comparable sales down 1.1% in weeks 1-4, before rebounding 3.3% in weeks 5-8.
DPZ stock currently trades at ~30x FY21 numbers, which isn't that demanding, in my view, given the best-in-class franchise and its track record of ~50-60% lease-adjusted returns (NASDAQ:ROIC).