Why Domino's Pizza Inc. Stock Slipped 12% Last Month

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What happened

Domino's Pizza Inc. (NYSE: DPZ) has been one of the best-performing stocks of recent years, but that doesn't mean every month is a winner. Last month, the pizza-delivery chain got tripped up after turning a mixed earnings report. The stock ended July down 12%, according to data from S&P Global Market Intelligence.

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Most of the stock's losses came on July 25, after Domino's reported earnings:

So what

Domino's shares fell 10% after the earnings report came out, even though the company reported strong numbers. The chain said revenue was up 14.8% to $628.6 million, which beat estimates at $613.4 million, riding a 9.5% increase in domestic comparable sales and a 2.6% uptick in international comps.

On the bottom line, earnings per share increased from $0.98 to $1.32, topping expectations at $1.22.

However, investors had a number of concerns, including slowing international growth, narrowing operating margin, and an earnings-per-share result that would have missed estimates had it not been for a lower tax rate.

CEO Patrick Doyle acknowledged that international same-store sales were "slightly under our expectations," but he added, "We remain very confident in our continued ability to generate best-in-class growth, and are encouraged by the strong store growth we are seeing from our international franchisees."

Now what

Domino's shares have bounced back from the depths of the sell-off, gaining 7% since then.

The company didn't issue guidance in the report, but its domestic same-store-sales growth near double digits and a streak of 94 quarters of international same-store-sales growth should offer some reassurance for investors. Store growth remains strong, as the company has opened more than 1,000 locations abroad in the past year.

With strong comparable-sales growth and delivery gaining in popularity, this stock should continue to outperform.

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Jeremy Bowman has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.