Domino's Pizza (DPZ -1.11%), the world's largest pizza chain measured by sales, is set to report fiscal 2021 first-quarter earnings on Thursday, April 29. Those interested in the company will be tuning in to see how sales are evolving as pandemic-related restrictions on dining inside at restaurants are easing. 

Moreover, there seems to be a bit of concern from investors on pizza fatigue. People cooped up in their homes for the better part of a year now have ordered a lot of pizza in that time. As more options on dining out are becoming available, some folks may seek alternatives to ordering pizza for a while. Admittedly, for now, this is an issue in the U.S, but if the vaccine rollout gains steam internationally, it will be an issue overseas as well.

The changing business conditions will make this report an interesting one. Let's take a look at three things current and potential investors in the company will want to make note of when Domino's reports first-quarter earnings this week. 

A fresh pepperoni pizza.

Image source: Getty Images.

Can revenue growth keep up with rising costs?  

First, those who are analyzing the report will want to look at global retail sales growth, which was 21.7% in Q4 of 2020. The pandemic was surging in most parts of the world during the winter months, and so it's not surprising people turned to Domino's pizza as a relatively safer and affordable way of feeding a family. While states in the U.S. are allowing restaurants to open for dining inside, other parts of the world are still facing harsher restrictions. It will be interesting to see how sales were impacted during that dynamic in the current quarter.

Second, you will want to know the net income reported, which increased by 17.5% year over year in the most recent quarter. As you may already know, Domino's operates under a franchise model, where most of the locations are owned by franchisees. The majority of expenses the company has is in its supply chain that provides the materials to its franchisees. Overall, increasing revenue is helping offset the rising costs of doing business during a pandemic. However, that may not be the case this quarter as revenue growth returns to historical averages while COVID-19-related costs stick around.

Finally, look at the pace of new store growth. The company guided investors to expect new store growth of 6% to 8% over the next few years. Management acknowledges that COVID-19-related restrictions slowed down construction in 2020. Still, it added 624 net new stores throughout the year to its total of 17,256 at the start of the year. More locations will certainly increase sales, and that's a key part of the company's medium-term target of 6% to 10% revenue growth.

What this could mean for investors 

Analysts on Wall Street expect Domino's to report first-quarter revenue of $983 million and earnings per share (EPS) of $2.93, which would be an increase of 12.6% in revenue from the same point last year. Meanwhile, the EPS estimate would be a decrease from the $3.07 reached last year. That highlights the challenges of operating a business during a pandemic that's causing price increases of everything from commodities to labor

If you zoom out and look at Domino's over the last decade, it has compounded revenue at an annual rate of 10% and EPS at a rate of 24%. Its business model works. People like pizza. If you buy and hold Domino's stock for the long run, it's very likely to add to your overall wealth.