Domino’s Pizza (DPZ) Up on Better Than Expected Earnings

Shares of Ann Arbor, Michigan, based Domino's Pizza, Inc. (DPZ) closed higher on Tuesday, in a market that was flat overall. The stock rose 11.33%, or $8.58 per share, to close at $84.30, on volume of 2,277,245 shares. The company reported third quarter earnings that exceeded analysts expectations, causing the stock price to surge.

Founded in 1960, Domino's is one of the leading pizza delivery companies in both the US and in the world.
The company has over 11,250 outlets around the world, 97% of which are owed by franchise owners. The company operates in over 75 international markets, with more than $8 billion in sales worldwide. Digital sales account for over 40% of the company's business in the US, and an even higher percentage worldwide. In June 2014, Domino's debuted voice ordering for its iPhone and Android apps, a true technology first within both traditional and e-commerce retail. Domino's had $142.99 million earnings on revenue of $1.8 billion in US sales in 2013 (calendar). The company's stock trades on the NYSE, and it has 10,000 employees.

For the company's third quarter ending September 8, it reported a profit of $35.6 million, or $0.63 per share. This was an 18.9% increase over the $.53 per share the company reported for third quarter of 2013. Analysts polled by Thomson Reuters had been expecting Domino's profit for the quarter to come in at $0.61 per share. Revenue rose to $446.6 million for the quarter, up 10.5% over the same period in 2013. Sales growth was driven by higher supply chain revenues from increased volumes in the supply chain centers and elevated commodity prices, specifically cheese.

Domino's performance is even more impressive given that pizza sales have been relatively flat across the industry. The improvement is coming as a result of it's upgraded product line, that includes pizza with thicker crusts and better blends of cheeses. The effort is paying off, as same store sales in the US have shown a 7.7% increase in sales in the past year, while international outlets have increased by 7.1%.

The company is doing particularly well in the international market. The increase in same store sales was the 83rd consecutive quarter that the company has experienced growth in same store sales in the international market. Meanwhile, the company has opened 160 new outlets globally for the quarter. The company is increasing its market share in foreign markets by customizing its products to appeal to local taste preferences.

According to Domino's President and Chief Executive Officer, J. Patrick Doyle, "Great people, food, service and technology have helped us deliver another strong quarter of global sales and profits. Our franchisees continued to drive vigorous store growth worldwide and have embraced our 'Pizza Theater' store re-image program in neighborhoods around the world."

On October 8, 2014, the Board of Directors declared a 25 cent per share quarterly dividend for shareholders of record as of December 15, 2014 to be paid on December 30, 2014.

Other News About Domino's Pizza
The long-term growth rate for Domino's is an impressive 15.2%.
Domino's Pizza to Offer Weeklong Carryout Special Just in Time for National Pizza Month
Domino's pizza theater features a number of elements not in "traditional" stores.

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Published on Oct 15, 2014
By Kevin Mercadante

Copyrighted 2020. Content published with author's permission.

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