What happened

Domino's Pizza (NYSE:DPZ) shareholders trailed a declining market in October as the stock fell 11% compared to the S&P 500's 2.8% drop, according to data provided by S&P Global Market Intelligence.

That decline still left Domino's well ahead of the broader market and up roughly 30% so far in 2020.

Five young adults share a pizza.

Image source: Getty Images.

So what

Investors weren't thrilled with the pizza delivery leader's early October fiscal third-quarter results, even though they showed accelerating sales growth and surging profits. Domino's volumes continued to be lifted by a shift toward home delivery during the pandemic, and revenue gains sped up to 17.5% in the core U.S. market from 16.1% a quarter earlier. Profits were similarly strong, with earnings per share jumping 22% to $2.49. Despite these results, investors pushed the stock lower in anticipation of future headwinds.

Now what

There's no shortage of challenges ahead for Domino's, including market share attacks by Papa John's International and aggressive discounting by companies like McDonald's, which is also trying to establish a large delivery platform.

Yet Domino's has steadily gained a bigger piece of the pizza delivery pie for more than a decade, and executives are eager to pad that lead through a mix of new product and delivery innovations and aggressive new store openings through 2021.

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