Please ensure Javascript is enabled for purposes of website accessibility
Free Article Join Over 1 Million Premium Members And Get More In-Depth Stock Guidance and Research

Why Domino's Stock Rose 11% in October

By Demitri Kalogeropoulos - Nov 4, 2019 at 9:10AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Investors were happy with the fast-food chain's latest earnings report.

What happened

Domino's ( DPZ 2.61% ) shares beat the market last month as the stock gained 11% compared to a 2% increase in the S&P 500 index, according to S&P Global Market Intelligence. The rally wasn't enough to put the pizza delivery chain's returns back above the market, though, as the stock is up less than 10% so far in 2019 compared to a 22% jump in the S&P.

Friends eating pizza.

Image source: Getty Images.

So what

Investors were pleased with Domino's third-quarter earnings report, which, while revealing slowing sales growth, included other good news for the business. The chain notched higher revenue at existing locations both at home and internationally, and it also added over 200 stores to its global base. These wins combined to produce 8% higher sales.

Now what

Executives took the opportunity to announce a new medium-term outlook that reflects tougher market conditions around home delivery. The influx of third-party aggregators and other restaurant chains means that growth will be harder to achieve, and so comps gains should slow over the next few years, management said. Domino's still sees plenty of room to add to its store base both in the U.S. and in key international markets like India and Brazil, meaning investor returns could remain robust.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Domino's Pizza, Inc. Stock Quote
Domino's Pizza, Inc.
DPZ
$525.00 (2.61%) $13.35

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
640%
 
S&P 500 Returns
139%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 12/03/2021.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Our Most Popular Articles

Premium Investing Services

Invest better with the Motley Fool. Get stock recommendations, portfolio guidance, and more from the Motley Fool's premium services.