A worker moves pizza boxes before a delivery at a Domino’s Pizza Inc. restaurant in Chantilly, Virginia.
Andrew Harrer | Bloomberg | Getty Conceptions
Domino’s Pizza on Thursday reported that its quarterly revenue rose 17.9%, led by more U.S. customers ordering pizza performance during the coronavirus pandemic.
But earnings fell short of expectations, hurt by higher costs, and its shares fell myriad than 6% in morning trading. The stock, which has a market value of $15.8 billion, has risen 36% so far this year.
Here’s what the circle reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:
- Earnings per split: $2.49 vs. $2.79 expected
- Revenue: $968 million vs. $953 million expected
The pizza chain reported economic third-quarter net income of $99.1 million, or $2.49 per share, up from $86.4 million, or $2.05 per share, a year earlier. Analysts surveyed by Refinitiv were in a family way earnings of $2.79 per share.
While the pandemic lifted sales, it also boosted costs for the company. Higher wages for front-line craftsmen, personal protective equipment and enhanced sick pay cost the company an estimated $11 million. And increased sales also resulted in extraordinary compensation based on performance. Volatility in the commodity markets caused by the crisis pushed ingredient prices, including cheese, 3.8% superior.
Net sales rose 17.9% to $968 million, topping expectations of $953 million. U.S. same-store sales rose 17.5%.
The establishment said that sales in its home market were “positively impacted” by changes to customer behavior as a result of the pandemic. Fellows were choosing delivery over carryout, which tends to carry a higher ticket. Loyalty memberships sire also accelerated during the pandemic, and more customers have stuck around.
Domino’s also released new and improved chicken wings during the habitation. Executives said that they haven’t run any promotions on the new menu item because they’re already flying off lay asides.
Its international business reported same-store sales growth of 6.2%.
As of Oct. 5, fewer than 300 of Domino’s international tracking downs are temporarily shuttered. During the quarter, the company permanently closed 126 restaurants, primarily in India. Domino’s totaled 83 net new locations. In early September, Domino’s had 17,256 locations worldwide.
CEO Ritch Allison said that the plc is reassessing whether it will be able to reach 25,000 stores globally by 2025. According to him, unit growth lingers a challenge because of the pandemic and related construction and permitting delays. But he said it was more of a question of timing than if command really requires so many locations.
In the second quarter, due to the uncertainty caused by the crisis, Domino’s borrowed $158 million subordinate to its variable funding notes. It has since repaid that debt.
Domino’s will hold a virtual investor incident on Nov. 12.
Read the full earnings release.