Commodities: Domino's dives despite rosy Q3 financials

| by S.A. Whitehead
Commodities: Domino's dives despite rosy Q3 financials

Late September's gain was last week's pain for Domino's, which, even after reporting same-store domestic sales growth of 8.4 percent in Q3, saw its stock price tumble last week. Other brands monitored by Pizza Marketplace fared better, while lower cheese and gas prices gave even the most forlorn pizza restaurateurs some cause to smile last week.


After spending most of last week above $1.75, cheese prices dropped Thursday and stayed down, closing Friday at $1.70 — still significantly higher than the prices paid for this commodity just a month ago.


Wheat was mixed compared with last week, and the USDA Agricultural Market News Service in Missouri said that, technically, winter wheat contracts are oversold, possibly limiting selling interest. 

Wheat’s long-term fundamentals remain bearish.  Weekly export sales for wheat showed a total of 6.4 million bushels for the 2017–2018 marketing year. 

Kansas City U.S. No. 1 Hard Red Winter, ordinary protein, rail bid was 3 cents lower at $4.41 1/4 to $5.51 1/4 per bushel.  Kansas City U.S. No. 2 Soft Red winter rail bid was not quoted. 

St. Louis truck U.S. No. 2 Soft Red Winter terminal bid was 9 cents to 15 cents higher at $4.15 to $4.20 per bushel.

Minneapolis and Duluth U.S. No. 1 Dark Northern Spring, 14 to 14.5 percent protein, rail, was 5 3/4 cents to 10 3/4 cents higher at $7.21 1/4 per bushel. Portland U.S. Soft White wheat, rail, was 11 1/2 to 14 cents lower at $5.04 1/4 to $5.31 per bushel.

Gasoline and diesel fuel

Gas prices continue to drop as they have for the past month, with the price paid this morning for a gallon of regular unleaded falling to $2.47, which is 2 cents lower than last week's price, and a full 16 cents lower than last month. But there's still room to go lower — at this time last year, the price was $2.24.

Mid-grade and premium gas followed that trend, with mid-grade dropping to $2.76 this morning, 14 cents lower than a month ago. Premium this morning averaged $3.01, or 13 cents lower than last month, but like the other grades, remained well above last year's price at this time.

Diesel has clung to the same price for a month now, falling just a penny during that time to $2.72 this morning, down a cent from a month ago, but still 30 cents higher than the average price paid one year ago.

Natural gas

Increased demand pushed prices higher for this commodity between Oct. 4 and Oct. 11. The Henry Hub spot price rose 12 cents  from $2.81/MMBtu last Wednesday to $2.93/MMBtu yesterday.

At the New York Mercantile Exchange, the November 2017 contract price fell 5 cents, from $2.940/MMBtu last Wednesday to $2.889/MMBtu yesterday.

Net injections to working gas totaled 87 billion cubic feet for the week ending Oct. 6. Working natural gas stocks total 3,595 Bcf, which is 4 percent less than the year-ago level and slightly lower than the five-year (2012–2016) average for this week.

The natural gas plant liquids composite price at Mont Belvieu, Texas, rose 10 cents, averaging $7.92/MMBtu for the week ending Oct. 11. The price of ethane fell 2 percent, while the price of natural gas rose a percentage point. Propane, butane, and isobutane prices each rose 2 percent.

According to Baker Hughes, for the week ending Friday, Oct. 6, the natural gas rig count decreased by two to 187. The number of oil-directed rigs also fell by two to 748. The total rig count decreased by four, and now stands at 936.

Pizza company stocks

Last week's gain was this week's pain for worldwide delivery chain Domino's, which skyrocketed to $205.38 at closing on Friday, Oct. 6 — a 17 percent rally since late August. But following release of Q3 financials that showed 8.4 percent growth in U.S. same store sales, the price dropped to $192.98.

There was better news for Pizza Hut parent, Yum Brands, which closed Friday at $76.20, up a healthy 27 cents from the previous week's price. Papa John's meanwhile, closed Friday at $70.62, up from $69.94 the previous Friday.  Lastly, take-and-bake brand, Papa Murphy's dropped 14 cents on the week, to close Friday $5.71.

photo istock

Topics: Financial News, Food & Beverage, Food Cost Management

Companies: Papa John's, Papa Murphy's, Pizza Hut, Domino's

S.A. Whitehead

Award-winning veteran print and broadcast journalist, Shelly Whitehead, has spent most of the last 30 years reporting for TV and newspapers, including the former Kentucky and Cincinnati Post and a number of network news affiliates nationally. She brings her cumulative experience as a multimedia storyteller and video producer to the web-based pages of and after a lifelong “love affair” with reporting the stories behind the businesses that make our world go ‘round. Ms. Whitehead is driven to find and share news of the many professional passions people take to work with them every day in the pizza and quick-service restaurant industry. She is particularly interested in the growing role of sustainable agriculture and nutrition in food service worldwide and is always ready to move on great story ideas and news tips.

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