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Why the Domino’s Pizza Enterprises Ltd (ASX:DMP) share price is down 14% in a month

In morning trade on Tuesday the Domino’s Pizza Enterprises Ltd (ASX: DMP) share price is down 0.8% to $47.00.

This means that the pizza chain operator’s shares have lost 14% of their value since this time last month.

Why are Domino’s shares down 14% in a month?

Investors have been heading to the exits over the last 30 days due to a weaker than expected trading update at its annual general meeting in November.

At the event the company revealed that group same store sales were up 2.9% for the first 17 weeks of FY 2019, putting it a touch below the low end of its full year guidance range of 3% to 6%.

It also meant that Domino’s had experienced a slowdown in same store sales growth since the release of its full year results. At that point, five weeks into FY 2019, group same stores sales growth was at 4.4%.

In addition to this, the company had only opened 36 new stores during the period, leaving it with an uphill battle to reach the 225 to 250 new store openings it has guided to in FY 2019.

I believe this has left investors concerned that the company could be on course to deliver another underwhelming result in FY 2019.

Should you buy the dip?

While there is a distinct prospect that Domino’s could fall short of expectations again this year, I’m optimistic that its new ANZ menu and improved trading in Japan will drive strong sales growth as the year progresses.

Because of this and its strong long-term growth prospects, I think Domino’s could be worth considering after its recent pullback. But only if you’re prepared to buy and hold onto its shares.

In addition to Domino’s, I also like the look of fellow food shares Collins Foods Ltd (ASX: CKF) and Costa Group Holdings Ltd (ASX: CGC) right now.

Motley Fool contributor James Mickleboro owns shares of Collins Foods Limited. The Motley Fool Australia owns shares of and has recommended COSTA GRP FPO. The Motley Fool Australia has recommended Collins Foods Limited and Domino's Pizza Enterprises Limited. 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 Scott Phillips.

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