This week sees the release of a large number of half year results from some of the most popular companies on the Australian share market.
One highly anticipated result that investors will no doubt be watching out for is the half year result of Domino's Pizza Enterprises Ltd (ASX: DMP) on Wednesday.
What is the market expecting?
According to a note out of Goldman Sachs, on the top line its analysts have forecast half year revenue of $661.3 million. This estimate is 4.2% ahead of the market consensus and would be a 16.5% increase on the prior corresponding period.
Goldman expects this to be driven by same store sales (SSS) growth of 3% in the ANZ segment, 1% SSS growth in Europe, and SSS growth of 5% in Japan.
Although SSS growth will be soft in Europe due to cycling a very strong period a year earlier, the broker expects overall top line growth to increase 28.7% due to a significant increase in its store network in the region.
In respect to earnings, Goldman has forecast half year EBITDA of $142.6 million. This is 3.6% ahead of the market consensus and will also be a 16.5% increase on the prior corresponding period.
Further, net profit after tax is expected to be $74.1 million, up 17.8% on the prior corresponding period and 4.4% above the market consensus.
Should you invest?
With the company's shares currently changing hands at approximately 26x estimated forward earnings, if Domino's delivers on expectations during the first half then I think it would make its shares good value and worthy of considering along with fellow consumer shares A2 Milk Company Ltd (ASX: A2M) and Collins Foods Ltd (ASX: CKF).
Especially given the company's plans to almost double its store network over the next six years. I expect this to drive strong earnings growth over the period, potentially generating solid returns for shareholders.
