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Domino’s Pizza Q3 Sales Up 6.9% but Core Earnings Miss Expectation by a Whisker

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Domino’s Pizza Inc. (NYSE: DPZ) reported on Tuesday that fiscal third quarter earnings rose 18%, driven by growth in international markets and higher domestic revenue; nevertheless, shares fell as core earnings missed analysts’ expectation by a cent, masking better-than-expected growth in same-store-sales.

The pizza chain’s sales have been showing consistent improvement in past few years after it changed its core pizza recipe and included new varieties such as thicker crust pan pizza.

For the latest period, Domino’s Pizza posted a 5.4% growth in same-store-sales in the U.S while international same-store-sales rose 5%.

Net income stood at $30.6 million or 53 cents a share in the fiscal third quarter compared to a profit of $26 million or 44 cents a share, in the year-ago quarter. Stripping out onetime items, the non-GAAP earnings stood at 51 cents a share, up from 43 cents, in the same period of last year.

Revenue increased 6.9% to $404.1 million, mainly due to addition of 126 new stores during the quarter. Most new stores were opened in overseas markets. However, in the U.S. the company has been slow on adding new stores. Higher costs and frugal consumer spending since the recession has restricted Domino’s Pizza to open more stores in the U.S. To overcome this, Domino’s Pizza has been trying to improve its margins so that franchisees are encouraged to open more stores.

In the latest period, Domino’s overall operating margin improved to 29.9% from 29.5% even as productions costs also increased.

 








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edliston
Post Written By: Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.

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Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing.

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