Domino’s Pizza (DPZ) delivered weaker-than-expected Q4 2021 and full-year results. Earnings and revenue missed consensus estimates despite the company registering solid same-store and retail sales growth.
Domino’s Pizza is a pizza company that operates a network of company-owned and franchise-owned stores in the U.S and abroad.
Revenue in Q4 plunged $13.4 million year-over-year to $1.34 billion, missing consensus estimates of $1.39 billion. U.S. same-store sales were up 1% year-over-year in Q4 and 3.5% for the full year. Q4 also marked the 112th consecutive quarter of international same-store sales growth, up 1.8%. Domino’s Pizza ended the quarter with 89 net U.S. store openings and 379 net international store openings.
Diluted earnings per share (EPS) for the quarter increased 22.8% year-over-year to $4.25 but fell short of consensus estimates of $4.30. The increase was driven by higher net income, which landed at $155.7 million compared to $151.9 million in Q4 2020. Full-year adjusted EPS increased 13.2% year-over-year to $13.60.
Domino’s Pizza’s board of directors has approved a $1.10 per share quarterly dividend to be paid on March 30, 2022, to shareholders of record as of March 15, 2022. Domino’s dividends have increased over the past 9 years leading to a dividend yield of 0.87%.
During Q4, Domino’s Pizza repurchased 443,085 shares for a total of $216.2 million. For the full year, the company repurchased 2.9 million shares of its common stock for a total of $1.32 billion.
UBS analyst Dennis Geiger has reiterated a Hold rating on Domino’s Pizza stock and cut the price target to $475 from $535, implying 9.90% upside potential to current levels. According to the analyst, the price cut reflects a lower multiple given limited visibility into peer performance. Lower sector growth stock valuations and rising interest rate expectations also contributed to the cut.
Consensus among analysts is a Moderate Buy based on 7 Buys, 6 Holds, and 2 Sells. The average Domino’s Pizza price target of $523.13 implies 21.04% upside potential to current levels.
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