Domino's Pizza's Return On Invested Capital Overview

Domino's Pizza's Return On Invested Capital Overview

According to Benzinga Pro, during Q2, Domino's Pizza DPZ earned $102.49 million, a 12.67% increase from the preceding quarter. Domino's Pizza also posted a total of $1.06 billion in sales, a 5.34% increase since Q1. Domino's Pizza earned $90.96 million, and sales totaled $1.01 billion in Q1.

Why Is ROIC Significant?

Return on Invested Capital is a measure of yearly pre-tax profit relative to capital invested by a business. Changes in earnings and sales indicate shifts in a company's ROIC. A higher ROIC is generally representative of successful growth of a company and is a sign of higher earnings per share in the future. A low or negative ROIC suggests the opposite. In Q2, Domino's Pizza posted an ROIC of 19.15%.

Keep in mind, while ROIC is a good measure of a company's recent performance, it is not a highly reliable predictor of a company's earnings or sales in the near future.

Return on Invested Capital is a measure of yearly pre-tax profit relative to capital invested by a business. Changes in earnings and sales indicate shifts in a company's ROIC. A higher ROIC is generally representative of successful growth of a company and is a sign of higher earnings per share in the future. A low or negative ROIC suggests the opposite. In Q2, Domino's Pizza posted an ROIC of 19.15%.

Keep in mind, while ROIC is a good measure of a company's recent performance, it is not a highly reliable predictor of a company's earnings or sales in the near future.

For Domino's Pizza, the positive return on invested capital ratio of 19.15% suggests that management is allocating their capital effectively. Effective capital allocation is a positive indicator that a company will achieve more durable success and favorable long-term returns.

Upcoming Earnings Estimate

Domino's Pizza reported Q2 earnings per share at $2.82/share, which did not meet analyst predictions of $2.88/share.

This article was generated by Benzinga's automated content engine and reviewed by an editor.

Posted In: BZI-ROCEEarnings