PHILADELPHIA, PA, August 30, 2013 /24-7PressRelease/
-- For years, the pizza company Domino's has been one of the closest things Australian investors have had to a sure thing--but according to 1Wealth Partners
, that may be changing. Domino's is a company that legitimately revolutionized the way pizzas are sold, particularly in Australia and in Europe. As such, the company has long enjoyed much prosperity--and so have its investors. A recent article
from The Australian suggests that the company has peaked, though--and in a new statement to the press, 1Wealth Partners agrees.
"While it is not necessarily accurate to say that Domino's has done anything wrong, or that the company itself has lost its luster, the numbers seem to reveal that Domino's is no longer the great investment option that it used to be," 1Wealth Partners says, in its press statement.
The article in The Australian testifies to this. It reports that the company has increased its earnings per share by more than 30 percent annually, from 2004 up through last year. "With such an impressive record, investors have developed high expectations of management to maintain these returns," the article offers."Yet the company's latest results indicate that management may be finding it more difficult to maintain this earnings trajectory."
Indeed, in its recently-uncovered 2013 full-year results, Domino's reveals that its earnings per share increased by just 11.5 percent. "The figure, in and of itself, is hardly dismal, but when you compare it to past years, it becomes clear that the company is not performing at the level it once did," 1Wealth Partners offers. "For investors, this has to be a bit of a disappointment."
While the earnings per share figures may have disappointed the market under any other circumstances, the company was saved by also announcing the purchase of a 75 percent stake in Domino's Japan. This announcement was enough to buoy investors, who sent the share price up by 9 percent in just one day.
While the news of this acquisition certainly proved welcome news to investors, The Australian continues, it is important for investors to look more closely at the Domino's management and business growth structures to see whether the core of the company truly remains solid.
The article explains that Domino's pursues growth by seeking to increase the number of stores within its network, and by increasing sales within each store. Australia and New Zealand both tend to fare well in both categories. However, long-term growth is stymied by the fact that the market can only tolerate so many stores--probably 750, with 585 already existing.
"This year management was unable to increase the number of franchisees to expectations and instead chose to open a higher number of corporate stores operated by the company," the article says. "This stretched the management team and resulted in sub-optimal food and [labor] management."
1Wealth Partners seeks to provide investors in Australia with up-to-date information about stock market strategies.
1Wealth Partnersoffersstock market software that provides maximum accuracy and efficiency to corporate and individual stock market traders. The company has been in Australia since 2003 and has developed a solid reputation for getting results. Their investment hub is based in Sydney, with offices spread across countries all over the world. The vision of 1Wealth is to partner investors with the technological tools and financial strategies they need to generate consistent stock market revenues, and ultimately to generate lifelong earnings.