Domino's Gains on Steven Cohen's Stake

ANN ARBOR, Mich. ( TheStreet) -- Domino's Pizza ( DPZ) got a boost Tuesday morning after hedge fund founder Steven A. Cohen disclosed a 5.3% passive stake in the pizza purveyor.

Cohen, founder of SAC Capital Advisors, a Stamford, Conn.-based hedge fund, owns 3.2 million shares of Domino's, a pizza delivery chain, according to a filing with the Securities and Exchange Commission

Domino's shares rose 1.6% to $16.82 in morning trading Tuesday, and were about 50% higher than year-earlier levels.

Domino's has had its risks in recent years as customer perceptions of its food quality mounted, but its financial standing is improving.

Domino's beat expectations for the third quarter , though net earnings actually declined year-over-year to $16.6 million, or 27 cents per share. Adjusted for one-time gains booked in the year-earlier period however, earnings did grow year-over-year.

Comparable same-store sales -- or sales at stores open at least one year, a closely watched metric in the restaurant industry -- grew 11.7% year-over-year, thanks to continued positive consumer response to the company's new pizza recipe, launched in December of 2009.

Feltl analyst Mark Smith told TheStreet late last year he was encouraged by Domino's performance after the new recipe was launched, and was surprised the momentum maintained as well as it did. Domino's also benefited because so many people who tried the new pizza ordered online, giving the company an easy way to continue marketing to them through email reminders, promotions and coupons.

A Sure Bets For Super Bowl Spending

Last year, according to Nielsen ratings, an estimated 153.4 million Americans watched part or all of the New Orleans Saints' victory over the Indianapolis Colts in Super Bowl XLIV, with the National Retail Federation estimating they spent $8.9 billion on the game.

Around 13.8% of those watchers hosted Super Bowl parties and another 25.6% attended them. The cost of snacks, drinks, apparel and even new televisions -- which the NRF says 3.6 million Americans bought last year, despite spending almost 10% less on everything else -- adds up quickly.

Pizza delivery

NFL pizza sponsor Papa John's ( PZZA)loves to throw around its estimate that Americans will eat 30 million slices of pizza on Super Bowl Sunday alone. Considering five times that many people watched the game last year, those 30 million slices scarcely seem like enough to go around. Still, Papa John's expects to send least 50% more pizzas out the door on Super Bowl Sunday than it does on any of the other Sundays on the calendar.

That's about 750,000 pizzas, but still short of its competitors at Domino's -- which expects to sell 1.1 million to 1.2 million pizzas on game day at a 40% to 45% improvement over its typical Sunday output, according to spokesman Tim McIntyre.

Yum! Brands' ( YUM) Pizza Hut, meanwhile, also expects a 50% increase, roughly 1.2 million orders and 1.7 million pizzas cycling through its ovens from kickoff to the presentation of the Vince Lombardi trophy. In light of last year's $10-a-pizza game special, that's $17 million in revenue without wings, pasta or any of the other add-ons.

-- Written by Miriam Marcus Reimer in New York.

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