Domino’s stock soars more than 25% on earnings beat; pizza chain backs long-term outlook

Earnings

A Domino’s Pizza food delivery courier drives a moped away from a Domino’s Pizza store in Hanwell, London.

Jason Alden| Bloomberg | Getty Images

Domino’s Pizza on Thursday reported quarterly earnings and revenue that topped analysts’ expectations after strong U.S. sales, despite increased competition.

Shares of the company soared 17% in premarket trading.

Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:

  • Earnings per share: $3.13, adjusted, vs. $2.98 expected
  • Revenue: $1.15 billion vs. $1.13 billion expected

The pizza chain reported fiscal fourth-quarter net income of $129.3 million, or $3.12 per share, up from $111.6 million, or $2.62 per share, a year earlier. Higher royalty revenue from franchisees and lower general and administrative expenses drove the increase in net income.

Excluding items, Domino’s earned $3.13 per share, topping the $2.98 per share expected by analysts surveyed by Refinitiv.

Net sales rose 6.3% to $1.15 billion, beating expectations of $1.13 billion. 

Domino’s reported U.S. same-store sales growth of 3.4%, topping Wall Street’s estimates of 2.3%. The chain has been facing greater competition from the likes of UberEats and DoorDash, putting pressure on Domino’s U.S. delivery sales.

In response to the trend, the pizza chain has been trying to grow its carryout sales and cut delivery times by strategically adding more U.S. locations. Domino’s added 141 net new U.S. restaurants in the fourth quarter.

“Our relentless focus on our customers, our franchisees and the long-term growth and profitability of the Domino’s business model helped us deliver a solid 2019 in the face of unique competitive headwinds,” CEO Ritch Allison said in a statement.

International same-store sales increased by 1.7% in the quarter.

The pizza chain also reaffirmed its two-to-three year outlook. Domino’s expects U.S. same-store sales growth in a range of 2% to 5% and global retail sales growth of 7% to 10%.

Products You May Like

Articles You May Like

Here’s one networking mistake most people make, according to LinkedIn’s co-founder Reid Hoffman
Nordstrom sales fall 40%, but retailer says it has ‘sufficient liquidity’ to weather pandemic
Americans are saving more and spending less, but it’s unlikely to continue as states start to reopen
Kylie Jenner’s former Calabasas, California home is on the market for $3.6 million – take a look inside
Cramer: ‘I get worried’ that without more coronavirus stimulus stock market could ‘sputter out’

Leave a Reply

Your email address will not be published. Required fields are marked *