市场见解

The Domino’s (ASX:DMP) share price is up 22% this year

Despite recent market volatility, the Domino’s (ASX: DMP) share price has remained resilient and is currently trading near all-time highs.
The post The Domino’s (ASX:DMP) share price is up 22% this year appeared first on The Motley Fool Australia. –

ASX pizza share price represented by pizzas in increasing bar chart formation

The Domino’s Pizza Enterprises Ltd (ASX: DMP) share price has had a bumper start to 2021.

Shares in the pizza behemoth have soared more than 22% since the start of the year. Despite recent market volatility, the Domino’s share price has remained resilient to trade near all-time highs.

Read on to find out more about the Domino’s share price.

What’s been fuelling the Domino’s share price?

Along with online retailers, fast food chains like Domino’s have been beneficiaries of the COVID-19 pandemic. During the last year, Domino’s has reported promising international growth and delivered a strong performance in the first half. 

Analysts are also bullish on the outlook for Domino’s, citing the company’s operating leverage to fuel growth. In addition, analysts have also noted the company’s strong balance sheet that could help Domino’s expand its brand.  

How has Domino’s been performing?

Earlier this year, Domino’s released mouth-watering results for the first half of FY21. For the 6 months ending 31 December, the company delivered strong sales and earnings growth.

For the first half, Domino’s reported a 16.5% increase in total global food sales of $1.84 billion. In addition, the company grew earnings before interest and tax (EBIT) by 32.3% for the period to $153 million. Domino’s also reported strong top-line growth for the period. In the first half, the company opened 131 new stores whilst also reporting an 8.5% increase in same store sales growth.

Furthermore, Domino’s also delivered on the bottom line. The company reported a 32.8% increase in underlying net profit after tax of $96.2 million. Free cash flow also improved by 50.3% for the period to $124.4 million.

According to Domino’s management, the strong performance during the pandemic is a reflection of the company’s long-term strategy. The Domino’s share price jumped by around 7.5% on the day the company’s half-year results were released.

Outlook

Domino’s holds the master franchise licence to the Domino’s brand in Australia, New Zealand, France, Belgium, the Netherlands, Germany, Japan and Denmark. The company currently operates more than 2,700 franchised and corporate-owned stores in these locations.

According to its latest shareholder meeting, Domino’s has a target of 5,550 stores by FY25. The company also noted that Germany and Japan are key growth markets that continue to go from strength to strength.

Domino’s expects Japan to overtake its Australian and New Zealand stores as the company’s largest market by October. In addition, Domino’s expects sales and profits in Japan to overtake Australian market results in the next few years.

Domino’s share price snapshot

In addition to rallying 22% so far in 2021, the Domino’s share price has climbed by almost 83% over the past 12 months. At Friday’s close, Domino’s shares closed the day 0.37% higher at $105.83. The company has a market capitalisation of around $9.16 billion.

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Motley Fool contributor Nikhil Gangaram 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.

The post The Domino’s (ASX:DMP) share price is up 22% this year appeared first on The Motley Fool Australia.

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