You can sell Domino's (DPZ) on that slight same store miss. But I think you would be missing something really huge: the company owned up to the weakness in international right at the top of the call and then the CEO, Ritch Allison, didn't dodge it at all when I asked him about it on Mad Money.
That, to me, is a sign that the Allison era is going to be a chip off the old Pat Doyle block. He owned the miss, owned it outright and is incredibly confident that he can fix it and get right back to the beat and raise days.
I find that a lot of CEOs will never, ever admit to any disappointment. Therefore there's nothing that will ever be fixed.
Domino's, because it is so big, so sprawling, periodically will have growing pains or it won't open enough stores in a given quarter or two and the fantastic growth gets obscured by some "off" same store sales numbers.
Then it comes roaring back.
I think this time will even be better because the roar back will be helped by the incredible fiasco that is Papa John's (PZZA) . We did some work on Domino's overlap and it is just incredible. I know pizzas aren't commodities, but I also know that it isn't like Papa John's has some sort of magic elixir in its pies.
The blowup there coupled with the continued softness at YUM! Brands (YUM) Pizza Hut, to me spells good things to come. Not only that but Ritch comes from international so whatever needs to be fixed will be fixed.
The stock has a lot of hot money in it. And there are some secular challenges: Zume Pizza has trucks with 50 pizza ovens in them assuring you the hottest and freshest. They are small but they are smart and have a lot of money. I am also still not sure where pizza fits in the millennial diet. They like it but they love protein-Wingstop (WING) !
Nevertheless I truly believe that its technological edge over all the other majors - 200,000 Hotspots where they can bring your pizza to your towel on the beach - just make the story one to buy, not sell, on the weakness, a very different development from so many other stocks. Oh, and Domino's has only the tiniest presence in China. Long Domino's, short YumChina? Nah, YumChina is much too much KFC and too little Pizza Hut. But dumber trades have worked!
