Domino's Pizza Enterprises Ltd. (ASX: DMP) shares gained 3.2% in today's trading, bringing the total gains for the Domino's share price to 17% in August.
As one of Australia's top 200 listed shares, Domino's makes up part of the S&P/ASX 200 Index (ASX: XJO). In contrast, the ASX 200 has gained 3.8% so far in August.
Despite being well-positioned in the takeout and food delivery market, Domino's shareholders weren't spared the pain during the wider COVID-19 share market selloff earlier this year. The Domino's share price tumbled 31% from 20 February through to 19 March.
Since then Domino's shares have been on a tear, up 94% from the March low. Year-to-date, the Domino's share price is up 61%, while the ASX 200 is still down 8%.
What does Domino's do?
Australian-owned Domino's Pizza Enterprises Limited is Domino's largest franchisee outside of the United States. The business predominantly makes pizzas with a focus on takeout and delivery services.
The company holds franchise rights to the Domino's brand in Australia, New Zealand, Belgium, France, The Netherlands, Japan, Germany, Luxembourg and Denmark, with more than 2,500 stores.
Domino's shares began trading on the ASX in 2005.
Why is the Domino's share price up 17% this month?
With the exception of this year's viral selloff, the Domino's share price has remained in a solid uptrend since July 2019.
It got a big boost following the release of its FY20 results on 19 August.
The company reported online sales growth of 21.4% and a 6.5% growth in the number of its franchisees. Same store sales growth came in at 5.8%, in line with the company's guidance. It also announced a huge uptick in free cash flow, which grew 90.6% to $161.8 million.
Domino's is well positioned with its takeout and delivery business model in these days of social distancing and rolling lockdowns. The company has also been quick to embrace new technologies, including AI-enabled voice assistants, app ordering and even drone delivery.
Domino's potential to deliver share price growth was clear to the Motley Fool's own Scott Phillips well before the coronavirus was forcing people to stay at home. Scott recommended Domino's in his Share Advisor service on 26 April 2018. Members who followed Scott's advice and held onto their shares have seen the Domino's share price gain 101% since then.
