MENU

Domino’s Pizza Enterprises Ltd. delivers investors a mixed trading update

Shares in Domino’s Pizza Enterprises Ltd. (ASX: DMP) closed flat at $48.10 today after the pizza store franchisor released some price sensitive news to the market out of its South Bank, Brisbane, AGM quite late in the trading day.

However, the news is unlikely to move the stock price much as it refers to, inter alia, a minor upgrade to European same-store sales growth forecasts from 5%-7% to 6%-8% over FY 2018.

In fact the group warned that “profit growth would be appreciably lower in the first half” due to the exceptional comparable period, which suggests it’s pinning its hopes on meeting its full year guidance on a stronger six-month period ending June 30 2018.

While same-store sales growth in Europe clocked in at an impressive 8.48% for the first 17 weeks of financial year 2018 its Japan business is looking increasing like an Achilles Heal with negligible same-store sales growth of 0.12%.

The company also confirmed it has bought back 1.87 million shares for a total of $87 million since August in a move that suggest management believe the stock represents decent value.

Overall, this was a bit of a mixed update by Domino’s recent standards that were blemished by a profit miss for the year ending June 30 2017.

As such the share price could remain flat over the months ahead as investors remain nervous over the reliance on a stronger second half to meet forecasts. As such I don’t think Domino’s shares at $48 offer a sufficient margin of safety given current valuations present some downside risk if the company does not deliver on its aggressive growth forecasts.

Why Elon Musk's "secret weapon" was the most shorted share in Australia...

On 9 March, the visionary Tesla co-founder and CEO made a bold $63,000,000 to save a large swath of Australia. But in the process, he accidentally revealed the small Melbourne-based company that allows him to consistently make the impossible possible. At one point, this little understood company was actually the single most heavily shorted share in all of the ASX. Yet oddly enough, nine out of 10 analysts call it a screaming BUY! And that includes Motley Fool Australia.

We just isolated this company as Elon Musk's "secret weapon", and think it's dynamic run (up more than double after initially floating shares just two and a half years ago!) is only getting started. For the full story on this company, as well as how to get invested alongside us today, simply click here!

Motley Fool contributor Tom Richardson has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.