Domino's Pizza Inc. is a leader in the pizza delivery business, having pioneered the concept 50 years ago. The company completed its initial public offering in July 2004. Domino's is primarily a franchise operation that derives revenue from fees and the sale of materials to franchisees. The company also directly owns almost 600 stores and uses them as a base for testing menu changes and as a pool for franchise liquidity. It has operations in 80 countries.

Monday Tee Up: Corporate America Checks In The third-quarter earnings floodgates open this week, despite Monday being a partial holiday (with the bond markets closed). Wall Street will be focused on retail sales data, looking for updates on consumer spending. Last week, the Dow Jones Industrial Average was higher by 1.2%, while the S&P 500 and the Nasdaq both gained 1.1%. For the year, the DJIA is higher by 14%, while the S&P 500 and the Nasdaq have both popped 22%. The earnings calendar this week is packed with big companies from a range of sectors. On Tuesday, Citigroup, Bank of America, Goldman Sachs, Charles Schwab, PNC Financial, State Street, United Airlines, Johnson & Johnson, and United Health all report. On Wednesday, Morgan Stanley, U.S. Bancorp, Discover Financial, and Abbott Labs weight in. On Thursday, it's Netflix and Travelers, and on Friday, American Express and Procter & Gamble step up to the plate. Earnings grew 13% in the second quarter. We expect 3Q earnings growth of 5%-7%. For full year, we forecast roughly a 7%-9% gain. In the 3Q, we expect Information Technology, Communication Services, and Healthcare to be the sectors that shine. On the economic calendar, Retail Sales will be updated on Thursday, as will Industrial Production and Capacity Utilization. On Friday, Housing Starts and Building Permits will be released. Argus Chief Economist Chris Graja, CFA, is highlighting Retail Sales as the call of the week. Chris expects the September report to show an annual increase of 2.2%. He adds that 'the report will be a timely health check on consumers ahead of the important holiday season. Employed consumers do their best to make the holidays special for the people they care about. The decline in the September unemployment rate to 4.1% should be a positive catalyst for shopping in November and December.' Last week, there were mixed signals on inflation. CPI slowed to 2.4% for September, down from 2.5% in August. Core CPI ticked up to 3.3% for September, compared to 3.2% in August. Looking deeper into core inflation data, the widely-watched shelter component is still proving to be sticky, with a rise of 4.9%. The Bureau of Labor Statistics said that this one component accounts for more than 65% of the total 12-month increase. Other categories with sizable increases include motor vehicle insurance, up 16%, and medical care, up 3.3%. Mortgage rates jumped up to 6.32% for the average 30-year fixed-rate mortgage. Gas prices dropped 4 cents to $3.14 per gallon for the average price of regular gas. The Atlanta Fed GDPNow indicator is forecasting for 3Q and calls for expansion of 3.2%. We have raised our 3Q growth forecast and now expect 3.0% this quarter, up from our prior forecast of 1.6%. The Cleveland Fed CPINow indicator for October currently is at 2.6%. The next Fed rate decisions are on November 7 and December 18. For November, odds are at 90% that there will be a 25-basis-point (bps) rate cut, this according to the CME FedWatch tool. There had been chatter about a bigger cut, but recent strong jobs data out squelched that idea. Argus forecasts two more rate cuts by the end of 2024 and three more in 2025, all by 25 bps.

The Portfolio Selector features the Argus Focus List, a group of 30 "best idea" stocks generated and regularly updated by Argus' analysts and investment policy committee. It also includes the director of research’s monthly investment strategy column, stock recommendations and sector picks, economic forecasts, and an asset allocation model. This month, the Focus List additions are Applied Materials Inc. (AMAT); TJX Companies, Inc. (TJX); GE HealthCare Technologies Inc (GEHC); Campbell Soup Co. (CPB) and the Focus List deletions are Dominos Pizza Inc (DPZ); Labcorp Holdings Inc. (LH); Mondelez International Inc. (MDLZ); Oracle Corp. (ORCL).

Domino’s is a restaurant operator and franchiser with nearly 20,600 global stores across more than 90 international markets at the end of 2023. The firm generates revenue through the sales of pizza, wings, salads, sandwiches, and desserts at company-owned stores, royalty and marketing contributions from franchise-operated stores, and its network of 25 domestic (and five Canadian) dough manufacturing and supply chain facilities, which centralize purchasing, preparation, and last-mile delivery for the firm's US and Canadian restaurants. With roughly $18.3 billion in 2023 system sales, Domino’s is the largest player in the global pizza market, ahead of Pizza Hut, Little Caesars, and narrow-moat Papa John’s.