Why the Domino’s (ASX:DMP) share price is up 27% in August

Domino’s shareholders are enjoying a hot and tasty treat this month.

| More on:
A couple of friends at a rooftop party enjoying some hot and tasty pizza.

Image source: Getty Images

The Domino’s Pizza Enterprises Ltd. (ASX: DMP) share price has been on fire in August. Shares in the pizza franchise are surging 27.3% higher this month to $148.50 per share at Friday’s close.

Here’s what’s boosting the company’s value higher in the last month.

Why the Domino’s share price is up 27% in August

The only price-sensitive ASX announcement from Domino’s this month was the release of its full-year results.

If you missed it, some of the key highlights from the 18 August Domino’s results are below:

  • Network sales increased 15% on the prior corresponding period (pcp) to $3.7 billion
  • Online sales up 21.5% on pcp to $2.9 billion
  • Net profit after tax up 29% on pcp to $188.2 million
  • Earnings per share (EPS) up 29% on pcp to 217.6 cents
  • Final dividend of 85.1 cents, translating to a 173.5 cent full-year dividend

The Domino’s share price jumped higher following the release of their results earlier this month. It’s been good news for shareholders in the weeks since, with the pizza franchise’s shares now up 27% in August.

Those strong gains have come despite broad lockdowns across Australia, particularly Sydney and Melbourne. However, this is not a new phenomenon for Domino’s.

When the COVID-19 restrictions were first introduced in March 2020 and the S&P/ASX 200 Index (ASX: XJO) slumped lower, the Domino’s share price bucked the trend.

While the pizza company’s shares did fall 25% lower, that pales in comparison to the losses amongst some of its ASX 200 peers.

One key factor was Domino’s ability to shift to an online strategy and maintain some sales momentum while much of the economy was put into hibernation.

In fact, Domino’s value has surged 214% higher since 20 March last year to its current $12.9 billion market capitalisation.

It looks like investors are expecting more of the same amid the current restrictions given the recent gains.

Should you invest $1,000 in Domino's Pizza right now?

Before you consider Domino's Pizza, you'll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Domino's Pizza wasn't one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Dominos Pizza Enterprises Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Gainers