What happened
Domino's (DPZ 1.93%) shareholders are trouncing the market this year as their stock gained 26% compared to a 4% decline in the S&P 500, according to data provided by S&P Global Market Intelligence.
The rally put the pizza delivery leader well ahead of many fast-food peers including McDonald's and Yum! Brands, while competitor Papa John's has posted similarly strong gains so far in 2020.
Image source: Getty Images.
So what
Investors initially worried about signs of slowing growth for Domino's as rivals across the fast food and casual dining spectrum poured into the home delivery market. But the chain eased those concerns in late February by showing rebounding demand trends. Enthusiasm held steady from there thanks to signs that the company is facing no cash shortage, and experienced spiking demand through the early phases of the COVID-19 pandemic. Comparable-store sales were up over 20% in April and May, in fact.
Now what
Domino's has warned investors to brace for a slowdown in late 2020 as those head-turning growth numbers can't continue indefinitely. But the business is still positioned to win market share even if conditions remain weak in the restaurant industry and many of its smaller peers consider scaling back their footprints.
