Investors Look to Domino’s Earnings to Understand Effects of Price Increases

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With Domino’s Pizza set to report its fourth-quarter earnings before the market opens on Thursday, investors look towards these results to assess the impact of U.S. price increases amid rising inflation.

According to Bloomberg, the restaurant chain is expected to deliver a $1.43 billion revenue, up 6.5% from a year earlier. Despite the revenue uptick, Domino’s expected adjusted earnings per share sit at $3.97, down 6.9% from the previous year.

UBS Analyst Dennis Geiger noted that Domino’s Pizza is one of the most watched and topical stocks in the industry due to its current growth and sales concerns along with its historically strong growth levels. This contrast gives analysts a strong basis for comparison when determining the extent of the impact of price rises on sales growth.

Last October, Domino’s Pizza executives announced plans to raise prices by around 7% in the fourth quarter. In raising its prices, Domino’s is keeping in line with the movements of its close competitors Papa John’s and Pizza Hut, both of which have similar price points.