Existing U.S. restaurants at Domino’s Pizza (DPZ) posted a 0.3% same-store sales increase for the third quarter, and Baird moved the stock to Outperform with a $400 target.
The new target is $80 above Baird’s previous $320 figure, a 25% increase. The brokerage tied its upgrade to a stronger assessment of sales at existing locations and franchisees’ profit prospects.
Domino’s third-quarter revenue grew 3.4% to $1.1856 billion, while net income increased 9.2% to $152.2 million. Diluted earnings per share rose 12.7% to $4.60.
The 0.3% same-store sales gain was 3.1 percentage points below revenue growth. Net income and diluted earnings per share grew faster than revenue, with the quarter’s reported growth rates ranging from 0.3% for same-store sales to 12.7% for diluted earnings per share.
The figures show a modest increase in sales at existing U.S. restaurants alongside faster growth in overall revenue and earnings. Baird’s rationale focused on its outlook for established-store sales and franchisee profitability.
