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What: Shares of pizza slinger Domino's Pizza (NYS: DPZ) were looking unappetizing to investors today as they fell as much as 14% in intraday trading after the company announced first-quarter earnings.
So what: Apparently I haven't been ordering enough pizza lately. First-quarter earnings per share for the pizza-delivery king were down 19% from a year ago, though the drop was driven by expenses associated with the company's recapitalization. Factoring out those costs, adjusted EPS grew 12% from 2011, to $0.47. That adjusted tally, however, still missed analysts' estimates, which called for $0.49 in per-share earnings. Revenue of $385 million, down 1% from last year, also missed Wall Street's expectations.
Now what: Mr. Market seems pretty upset by Domino's results today and to some extent he's got a point. However, from a big-picture perspective, there was a lot to like about Domino's quarter. For starters, the 12% year-over-year adjusted EPS growth is nothing to sneeze at. Same-store sales also looked good, with domestic stores growing 2% and international stores up 4.7%. And speaking of international stores, the company continues to expand overseas and CEO J. Patrick Doyle pointed out that there are now more international Domino's stores than U.S. ones.
All in all, it may not have been quite the quarter that investors were hoping for, but the market's reaction looks a bit too harsh.
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