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Domino's (DPZ) Gears Up for Q1 Earnings: What's in Store?

Domino's Pizza, Inc. DPZ is scheduled to report first-quarter 2023 results on Apr 27, before the opening bell. In the last reported quarter, the company’s earnings surpassed the Zacks Consensus Estimate by 13%.

Q1 Estimates

The Zacks Consensus Estimate for earnings is pegged at $2.65 per share, suggesting growth of 6% from the prior-year quarter. Over the past seven days, earnings estimates have been revised upward by 1.1%. The consensus mark for revenues is pegged at $1.03 billion, suggesting an improvement of 1.8% from the prior-year reported figure.

Factors to Note

Domino's fiscal first-quarter top line is likely to have benefited from expansion efforts, digitalization and robust comp growth. Increase in sales in the U.S. company-owned stores and easing of supply-chain constrains are likely to have aided the top line.

We expect the U.S. company-owned stores and the U.S. franchise advertising revenues to increase 8% and 6% to $112.2 million and $113 million, respectively. The U.S. franchise royalties and fees are expected to increase 4.6% to $127.9 million. However, our model predicts, supply-chain revenues to decline 4.9% year over year to $579.4 million.     

The company continues to witness growth in terms of its carryout and delivery businesses. It has been focusing on Car Side Delivery 2-Minute Guarantee with awareness campaigns. Increased revenues from franchise advertising and supply chain might have driven the fiscal fourth-quarter performance.

However, elevated wage pressures and inflation of commodities are likely to have negatively impacted DPZ’s bottom line. Our model estimates total cost of sales to increase 2.1% year over year to $905.6 million. Gross margin in the quarter is likely to be 34.9% compared with 36.5% reported in the prior-year quarter.

Domino's Pizza Inc Price and EPS Surprise

Domino's Pizza Inc price-eps-surprise | Domino's Pizza Inc Quote

What the Zacks Model Unveils

Our proven model doesn’t conclusively predict an earnings beat for Domino's this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.

Earnings ESP: Domino's has an Earnings ESP of +1.75%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Domino's carries a Zacks Rank #4 (Sell).

Stocks Poised to Beat Estimates

Here are some stocks worth considering from the Zacks Retail-Wholesale space as our model shows that these have the right combination of elements to beat on earnings this season.

McDonald's Corporation MCD currently has an Earnings ESP of +1.48% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

MCD’s earnings beat estimates in each of the trailing four quarters, the average being 4.6%. Earnings for the to-be-reported quarter are expected to increase 4.3% year over year.

Starbucks Corporation SBUX has an Earnings ESP of +2.73% and a Zacks Rank #3.

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SBUX’s earnings beat the consensus mark in two of the last four quarters and missed twice. It has a trailing four-quarter earnings surprise of 4%, on average.

The Wendy's Company WEN currently has an Earnings ESP of +4.48% and a Zacks Rank #3.

WEN’s earnings beat the consensus mark in three of the last four quarters and missed once. It has a trailing four-quarter earnings surprise of 4.5%, on average. Earnings for the to-be-reported quarter are expected to increase 17.7% year over year.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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Starbucks Corporation (SBUX) : Free Stock Analysis Report

McDonald's Corporation (MCD) : Free Stock Analysis Report

Domino's Pizza Inc (DPZ) : Free Stock Analysis Report

The Wendy's Company (WEN) : Free Stock Analysis Report

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