I am a shareholder of Mexico's Alsea ( OTCPK:ALSSF) (MEX:ALSEA) which is the largest franchise restaurant chain in Latin America. A great deal of the company's growth in recent years has come from foreign markets. He also points out other positive metrics, such as the 99% annual franchisee retention rate, which suggests that the average store will last for decades and that Domino's should enjoy much more stable than usual cash flows as compared to the broader restaurant industry.Īnother positive factor is how well Domino's has fared internationally. While Domino’s typically runs at stronger restaurant margins and lower buildout costs than its competitors, strong store-level sales suggest a meaningfully higher franchisee return even at identical margin structures and buildout costs, an advantage that we view as reflective of the firm’s strong brand." against $1.2 million at Papa John’s and $860,000 Pizza Hut, per Euromonitor and our calculations), resulting in impressive franchise-level EBITDA just shy of $140,000 in 2022. To this effect, Domino’s sports higher average unit sales than peers ($1.3 million in the U.S. "Comparable sales, which operate as "flows," accrue over time in higher average unit volumes ("stocks"), allowing franchisees to generate more EBITDA at the same operating margin-improving their cash-on-cash returns and underpinning a strong growth narrative. Here's Morningstar's Sean Dunlop explaining why Domino's has a wide competitive moat: And there's certainly no shortage of rival pizza brands out there. Restaurants are a notoriously difficult business to establish much of a competitive moat in. What Gives Domino's So Much Sticking Power? So it's worth diving into Domino's here and see if shares might be a compelling opportunity after the significant drawdown. That said, Domino's earnings results haven't been particularly bad it's not like sales have collapsed or anything. Now that the economy has reopened, there are more food options out there, so Domino's has to compete more aggressively for business. People stuck at home ordered a lot of delivery pizza. Some of this is likely related to the same pandemic-related dynamics that have hit so many industries. Since 2021, however, Domino's has cooled back off, with the stock dropping from above $500 back to $300. Shares went up as much as 50x from the lows: After struggling through the 2008 financial crisis amid lackluster sales and poor brand positioning, Domino's brought in a charismatic CEO who turned everything around. The stock has moved down across its 200-day moving average of $10.37 today.Coldsnowstorm/iStock Unreleased via Getty Imagesĭomino's Pizza ( NYSE: DPZ) is one of the most remarkable corporate comeback stories in recent American history. The stock has been sinking recently, and shares are down $1.68 (-15.8%) from a price of $10.60 on April 24, 2012. While trading at a volume of 202,222, the stock price has fallen 15.1%. QuinStreet (NASDAQ:QNST) gapped down today, opening at $8.77 after closing the previous trading session at $10.51.The stock is trading 8.8% above its 200-day moving average. Over the last month, the share price has dropped $1.52 (-5.6%) from $26.97 on March 30, 2012. The stock price is down 5.5% with a volume of 221,937. With an opening price of $23.75, PAREXEL International Corporation (NASDAQ:PRXL) gapped down from its previous close of $26.94.The stock has dropped a step closer to its 200-day moving average, sitting just 0.3% above the mark. The stock has been going in a negative direction over the last month, dropping $3.55 (-8.5%) from a price of $41.97 on March 30, 2012. Shares are down 8.6%, trading at a volume of 515,828. After closing the previous trading session at $42.05, Arrow Electronics (NYSE:ARW) gapped down with an opening price of $37.62.Shares are trading at a volume of 3.4 million at a price decrease of 10.1%. Integrated Device Technology (NASDAQ:IDTI) opened at $5.96 after closing the previous trading session at $6.78, gapping down.The stock is trading at 75.2% of its 50-day moving average and 74.8% of its 200-day moving average. Shares have dropped 10.3%, trading at a volume of 1.2 million.
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