Domino's Pizza (DPZ 2.10%) recently announced solid operating results in its fiscal third quarter in a report that was packed with valuable information for investors.

In this video from "Beat & Raise" from Motley Fool Liverecorded on Oct. 14, Fool contributors Parkev Tatevosian and Demitri Kalogeropoulos discuss a key piece of the report, the chain's long-term growth outlook.

10 stocks we like better than Domino's Pizza
When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

They just revealed what they believe are the ten best stocks for investors to buy right now... and Domino's Pizza wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks


*Stock Advisor returns as of September 17, 2021


Demitri Kalogeropoulos: Domino's doesn't provide short-term forecasts in terms of sales and earnings. They do have a three- to five-year plan that they've detailed. But they do update some investors on this big-picture takeaways of what they see driving the business today. These numbers on this slide, most of them have not changed. Expenses are still going to be in that $400 million rate. Then foreign exchanges with this FX number is. But the food basket did change and that is their estimate of inflation.

If you've been following a lot of earnings reports past month or so, you know that inflation, especially on food, has gone up and accelerated since companies reported their last earnings report. Domino's estimated between 2.5% to 3.5% of higher cost on their raw ingredients and now they're saying that it's going to be on the high end of that. Which I guess is actually not as bad as many investors might have worried, might have feared that, they might have thought that Domino's would hike that number up.

They're just saying it's going to be toward the high end of their previous forecast. Maybe closer at 4% rather than in that 3% range. But as we noted earlier, that increased cost hasn't really hurt the bottom line this quarter. Operating margins went up. Net income was 12% of sales versus 10%. Margins, if anything, Domino's is getting a little bit more profitable right now even though costs are rising.

Then moving down, if, Parkev, you want to take the big-picture final slide here on their bigger outlook.

Parkev Tatevosian: Sure, yeah. Longer term over the next two or three years, they're targeting net new store growth of about 6% to 8%. Several of the reasons we mentioned earlier, that's going to challenge that near-term growth because of the labor and material and other shortages they are experiencing.

Management did note that they have a deep pipeline of potential store openings. Over time, they should not have difficulty achieving that store growth. Well, so as the near-term bottlenecks ease, it'll help them achieve those targets. Sorry, just to finish up, but combined with that 6% to 10% retail sales growth, then you have solid top-line revenue growth from an investor standpoint.

Kalogeropoulos: They're still hoping to grow the U.S. numbers. Something to watch, I would say going forward, especially because it seemed to be an inflection this quarter. But I doubt that's going to continue. I think it's probably just a residual impact of the craziness that we've had with the pandemic, the swings in consumer demand. That number did go negative.

I'm definitely going to be watching the next couple of quarters to see where it goes. If it does like management, and as I would expect, it would return to that normal low-single-digit expansion rate somewhere around 3% to 5%. Then international comps are almost double that somewhere in that 6% to 8%, that's about what they're hoping. Then you add those two together and you're getting to that systemwide sales number that's closer to between 6 and 8 with a reasonable shot at close to double-digits.

Then, Parkev, earnings when you looked at, earnings are growing faster, closer to that 25% rate.

That's a recipe for pretty great investor returns, I would say, over the long term if they keep doing what they've been doing for the last decade.