Factors Setting The Tone For Domino's (DPZ) Q4 Earnings

Domino's Pizza, Inc. (NYSE:DPZ) is scheduled to report fourth-quarter 2019 earnings on Feb 20, before the opening bell. In the last reported quarter, the company’s earnings surpassed the Zacks Consensus Estimate by 0.5%. Further, the bottom line outpaced the consensus mark in three of the trailing four quarters and missing in the remaining one. It has a trailing four quarter posrtive surprise of 3.7% on average.

Q4 Expectations

The Zacks Consensus Estimate for fourth-quarter earnings is pegged at $2.93, higher than $2.62 reported in the year-ago quarter. Over the past seven days, the company’s earnings estimates have increased 0.3%.

For quarterly revenues, the consensus mark stands at nearly $1,123 million, indicating an improvement of 3.6% from the prior-year quarter.

Factors at Play

Domino's results in fourth-quarter 2019 are likely to have benefited from robust international and domestic revenues. Domino’s solid digital ordering system, robust international expansion and other sales initiatives are likely to have positively impacted the company’s performance in the quarter to be reported.

The Zacks Consensus Estimate for international revenues is pegged at $76 million, suggesting growth of 7% from the prior-year quarter. Moreover, domestic revenues from franchise and supply chain are pegged at $134 million and $658 million, indicating an improvement of 7.2% and 6.6%, respectively, from the year-ago reported figure. However, domestic company-owned stores’ revenues are likely to witness a sharp decline of 17.9% to $128 million.

Apart from the established markets such as Canada, Japan, Italy, the U.K., Ireland, Switzerland and South Korea, the emerging markets like Brazil, China, Indonesia and Turkey have been posting solid growth. Australia, Russia, New Zealand and Saudi Arabia have also been gaining momentum.

However, negative currency translation and a tricky consumer spending environment in the U.S. restaurant space is likely to have weighed on the fourth-quarter performance.

Domino's Pizza Inc Price and EPS Surprise

What Does the Zacks Model Say

Our proven model does not conclusively predict an earnings beat for Domino's this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that's not the case here.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Domino's has a Zacks Rank #2 and an Earnings ESP of 0.00%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stock With Favorable Combinations

Here are a few stocks from the Retail-Wholesale sector that investors may consider as our model shows that these have the right combination of elements to post an earnings beat in the upcoming releases:

Rite Aid Corporation (NYSE:RAD) has an Earnings ESP of +33.33% and a Zacks Rank #1.

Papa John's International, Inc. (NASDAQ:PZZA) has an Earnings ESP of +0.79% and a Zacks Rank #2.

The Wendy's Company (NASDAQ:WEN) has an Earnings ESP of +8.00% and a Zacks Rank #3.

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