Sneak Peek: Domino’s (DPZ) Looking To Deliver On High Expectations

Earnings Estimates (High/Mean/Low): $0.31 / $0.28 / $0.24

Domino’s Pizza Inc. (NYSE: DPZ) is set to report earnings this Tuesday, July 27th, before the bell.  The conference call is currently scheduled to follow at  11 AM Eastern.

Founded in 1960, Domino’s operates a network of 9,036 franchised and Company-owned stores in the United States and over 60 international markets.  The company pulled in global retail sales of over $5.6 billion in 2009, comprised of nearly $3.1 billion in the U.S. and over $2.5 billion internationally.  During the first Q of 2010, DPZ had global retail sales of over $1.4 billion, with nearly $644 million generated abroad.

This past June, Pizza Today, the leading publication of the pizza industry, named Domino’s its “Chain of the Year,” making the company a two-time winner of the honor.  Domino’s has expanded its menu significantly since 2008 to include Oven Baked Sandwiches and BreadBowl Pasta, and in 2009 debuted its ‘Inspired New Pizza’ – a permanent change to its core hand-tossed product, reinvented from the crust up with new sauce, cheese and garlic seasoned crust.

DPZ has beaten estimates in six of its past eleven quarterly reports and the last six a row.  Current mean estimates of $0.28 are pricing in 33% YOY gains, but a 25% drop QOQ.

After hitting highs of $16.32 in late-April, shares plunged nearly 35% to $10.66 on July 1.  Since then, shares have put together a respectable rally, finishing up last week at $13.20.  Shares have been turned back at the $13-$13.50 range many times over the past few months.  A solid Q will be needed to make that resistance level a thing of the past.  If they can manage it, look for shares to run toward $14.40 before taking a shot at the aforementioned late-April highs.  DPZ’s earnings are highly correlated to cheese prices, so expect that to be a hot topic on the call.

Disclosure: No holdings in DPZ.