Latest news with #JulieHyman
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2 hours ago
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Domino's Q2 revenue beat: Why this analyst still isn't bullish
Bernstein senior analyst for US restaurants Danilo Gargiulo joins Market Catalysts with Julie Hyman to discuss Domino's (DPZ) second quarter earnings results, where the company beat revenue estimates. To watch more expert insights and analysis on the latest market action, check out more Market Catalysts here. Domino's giving up on some earlier gains after it topped second quarter revenue estimates boosted by strong same store sales growth. Joining me now Danilo Garzillo, Bernstein senior analyst for US restaurants. Danilo, it's good to see you. You've got a neutral rating on the stock, but you did, um, like most of your peers, you were impressed by these results. Was there anything on the call or in the results that you think could be responsible for the pullback that we're now seeing in the shares? I will actually point something else. Maybe during the call, there were a couple of comments that I think were incremental, um, that the CEO Russell was trying to explain, not only the strength of the fundamentals of Domino's potentially during into 2026 and the international markets, um, you know, having some sort of recovery overall. I think there were a couple of comments that were interesting on the potential menu platform expansion that Domino's could be having in 2026 or beyond that could be driving the stock further. But I think to your question directly on the potential pullback that we might have seen, I think the uncertainty on international markets regarding the number of units, um, given the situation that is unfolding with one of their master franchisees could be the potential cause for this deceleration. Gotcha. Interesting. So the shares are now down about 2%, but to your point on the longer term, um, how much was sort of menu innovation? I mean, if you're looking out further and seeing more menu expansion, how much was menu innovation a driver for traffic and sales in the quarter? Yeah. I think it was a significant component of their acceleration and it has been a significant component of Domino's acceleration. If you look at also the past 10 years, right, they've been gaining market share quite consistently over the past 10 years where others have been closing their stores, Domino's has been able to open their stores. And part of the reasons why Domino's has been able to boost it is because the franchisee economics has been relatively solid, um, given that the menu innovation has also attracted more and more new consumers. So specifically this quarter, there's been a boost in sales derived by the launch of the parmesan stuffed crust pizza last quarter that should be helping for at least the remaining of 2025 and into 2026 the sales to remain sustained. I'm also curious, um, you know, the company also talked on the call about the national rollout on DoorDash and that that is a potential driver here. How much do you think that's going to help traffic? Yeah, I would say so far it has been relatively minimum impact into the 2Q number, simply because the timing of the partnership was towards the end of the quarter. But I think we have seen also with Uber Eats that exit rate of end of last year it was about 3% as a total sales that Domino's was generating in the US. And so I would think that DoorDash having twice as much, you know, twice as much market share compared to Uber Eats will be a meaningful contributor to Domino's sales going forward. The only question is going to be how much of the overlap might be we seeing from users who are both Uber Eats and DoorDash users. So how much of that could be potentially a drawback into the overall upside optionality that this platform will provide to Domino's. But definitely there is a set of consumers who don't have their Domino's apps and by heading just an aggregator on their mobile phone are going to be having access to Domino's pizza, but as before they couldn't. Um, Danilo, what about the cost side of the equation? I saw one of your, um, peers, another analyst flagged that there was some margin compression. What accounted for that, and is that going to continue to be an issue? Yeah, I would say there were two main components. On the food side, I think we were not particularly worried because management had already called out the potential fluctuations on on the food. Um, the part that really was a surprise for us and I think for everybody was some one-off impact that some insurance charges really had on the on the second quarter earning. This should be like a one-off, so I'm not entirely worried. Now, clearly, as we think about the value intensity in the pizza category, and if we think about some of the mix shift that we might be seeing because the carry out component of Domino's is growing, then clearly there could be some potential margin compression over time, like marginal margin compression over time that, you know, one should be potentially expecting for Domino's, given that the vast majority of the productivity gains has already been achieved by Domino's. And Danilo, as I mentioned, you've got a market perform, a neutral equivalent on this stock. Um, I'm curious why, especially given these results, what's still sort of holding you back from being more bullish? Yeah, I think most investors will want to see a couple of things. Number one, either a better entry point, right? The stock already trading mostly in line, if not a little bit above their five-year median in terms of valuation that clearly calls out for sustainable same-store sales growth and acceleration in units. And I think obviously you would want to see some elements of that sustaining over time. And then the second part that investors have been a little bit more concerned about is how much of these 2025 out performance in the first quarter, which by the way is going to be accelerating in the second quarter as well, because of the timing of some of these initiatives, how much of that is going to be retained in 2026 when you're going to start lapping the launch of the stuffed crust pizza, the launch of the DoorDash partnership. So any incremental news, like new menu items, like the one that Russell, the CEO, was mentioning in the call, like, you know, the potential fried chicken addition into their menu, that could be a clear catalyst for the stock reacceleration and sustainability of an even a higher multiple versus their versus their historical median. Danilo, when you're looking ahead to some of those other innovations, maybe on the menu that we're waiting for, any requests, anything that you think that they should be developing? Look, I think the Wingstop example clearly is clear. Um, the having fried chicken has been working thoroughly in many parts of the world. I don't know if the version that Domino's has necessarily on their menu could be as satisfactory to the vast majority of consumers as of now. So as Domino's is exploring the, you know, the void areas into their menu, and now they have the capacity to the stores to potentially adding some fryers, I would think that could be like a potential venue for them to be entering a little bit more aggressively. Other than that, there is always opportunity to be a little bit more streamlined in some SKUs that don't have the highest level of velocity, but I would say fried chicken seems to be the place where everybody's trying to crowd the market right now, and it will be like a safe bet.
Yahoo
11 hours ago
- Business
- Yahoo
Market's underlying 'angst' could lead to August volatility
RBC Capital Markets equity derivatives strategist Amy Wu Silverman joins Morning Brief with Julie Hyman to discuss how markets (^DJI, ^GSPC, ^IXIC) have been reacting to Fed uncertainty and tariff uncertainty. To watch more expert insights and analysis on the latest market action, check out more Morning Brief here. Markets seem to be shrugging off the latest trade back and forth. My next guest says volatility potholes, as she's calling them, could be ahead in August. Joining me now, Amy Wu Silverman, RBC Capital Markets Equity Derivatives Strategist. Ah, same, same today. We had the same thought on the color there, Amy. Um, good to see you. Um, Good to see you. You know, this has been sort of an ongoing discussion we've been having with you and other strategists just how resilient the market has been, at least on the surface, uh, in the face of these continued tariff threats. Is there anything under the water line, so to speak, that you're seeing? Look, there is, Julie. I think there is a lot of angst under the surface. One way that we identify that is just, you know, how do option prices, how does volatility look in the future? So maybe not the next month, maybe not the next two months, but even three, four, six, 12 months out. And that's where you do start to see investors demanding protection. There's heightened levels of volatility. We refer to that as the term structure, but it's simply saying that there is a good deal of worry, not necessarily for the summer months as the negotiations are still going on, but longer term, you know, there could be any number of reasons why, but it is much higher than normal. And that actually has been true since Liberation Day. And so do you think that there is complacency in the markets right now? And if so, I guess define what complacency is and what the risks are around that. Yeah, so when you think about it, if if you were an investor who was worried about tariffs, and you had obviously that gap during Liberation Day, but then you really got whipsawed, right? So when the market rallied that hard, you actually were caught offsides. And then you've had difficulty hedging near term because a lot of what Trump says, uh, you know, is subject to negotiation, is subject to deadlines being pushed back. Essentially what's happened is those folks who have been hedging kind of post that rally began have had a hard time. And so it's hard to keep those positions on. You know, that's not necessarily complacency. It's just this turbulence with regard to timing. I would flag that we're going into August, which tends to be seasonally poor for returns, seasonally high for volatility. And August 5th last year is when we got a major volatility pothole with the VIX spiking to over 60. Right. The summer has this sort of false reputation of being quiet when it's not necessarily a lot of the time, Amy. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
a day ago
- Business
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Navitas skyrockets, Dollar Tree upgraded, Sarepta & FDA
Julie Hyman outlines some of the top stories on Wall Street as part of Monday, July 21's Market Minute. Navitas (NVTS) stock skyrockets to a 52-week high. Dollar Tree (DLTR) was upgraded to Overweight by Barclays analysts, citing consumer spending trends and the sale of the company's Family Dollar unit. Sarepta Therapeutics (SRPT) stock is falling as the company refuses an informal request from the US Food and Drug Administration (FDA) to stop shipping its drug Elevidys. Stay up to date on the latest market action, minute-by-minute, with Yahoo Finance's Market Minute. It's time for Yahoo! Finance's Market Minute. Stocks are rallying to start a busy week on Wall Street, the S&P 500 and NASDAQ eyeing yet another record high close as investors look ahead to earnings from tech heavyweights like Tesla and Alphabet on Wednesday. Shares of Navitas Semiconductor exploding to a 52-week high today. They're up about 30%. The company's been on a tear this year after announcing a strategic partnership with Nvidia. The small chipmaker set to release its earnings on August 4th. And Dollar Tree is getting an upgrade at Barclays to Overweight. The analysts there citing shifts in consumer spending and the sale of its Family Dollar unit as growth tailwinds. Plus Sarepta Therapeutics shares declining once again. The company refusing the FDA's request to stop shipping its best-selling gene therapy. This comes after Sarepta reported the death of a third patient in one of its clinical trials. The stock got a series of analyst downgrades on the back of this news. And that's your Yahoo! Finance Market Minute. Scan the QR code below to track the best and worst performing stocks of the session. Related Videos Mag 7 earnings: Why Alphabet is the 'bigger story' — not Tesla Alphabet earnings, Cleveland-Cliffs surges, CSX upgraded Travel stock earnings: What to watch for Why so many companies are trying to become banks Sign in to access your portfolio
Yahoo
3 days ago
- Business
- Yahoo
IPO outlook: Why you can expect 'more activity' this fall
EquityZen head of market insight Brianne Lynch joins Market Catalysts with Julie Hyman to discuss the initial public offering (IPO) market so far this year and what the outlook might be for the second half of 2025. To watch more expert insights and analysis on the latest market action, check out more Market Catalysts here. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
5 days ago
- Business
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Starbucks hit with Street-low price target, Opendoor surges
Julie Hyman examines what's driving interest in two top stories on Wall Street in Yahoo Finance's Market Minute. Starbucks (SBUX) was downgraded to Underperform by Jefferies. The analysts also gave the stock a Street-low price target of $76, citing weak consumer spending and costs associated with ongoing turnaround efforts. Real-estate platform Opendoor Technologies (OPEN) stock is surging after activist investor Eric Jackson expressed a bullish stance on the stock. Stay up to date on the latest market action, minute-by-minute, with Yahoo Finance's Market Minute.
