A employee moves pizza boxes before a delivery at a Domino’s Pizza Inc. restaurant in Chantilly, Virginia.
Andrew Harrer | Bloomberg | Getty Images
Domino’s Pizza on Thursday reported that its quarterly revenue rose 17.9%, led by more U.S. customers ordering pizza delivery during the coronavirus pandemic.
But earnings fell short of expectations, hurt by higher costs, and shares fell more than 5% in premarket trading. The stock, which has a market value of $16.2 billion, has risen 40% so far this year.
Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:
- Earnings per share: $2.49 vs. $2.79 expected
- Revenue: $968 million vs. $953 million expected
The pizza chain reported fiscal 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 expecting earnings of $2.79 per share.
While the pandemic lifted sales, it also boosted costs for the company. Higher wages for frontline workers and enhanced sick pay hurt its earnings. And increased sales also resulted in higher compensation based on performance.
Net sales rose 17.9% to $968 million, topping expectations of $953 million. U.S. same-store sales rose 17.5%. The company said that sales in its home market were “positively impacted” by changes to customer behavior as a result of the pandemic. Its international business reported same-store sales growth of 6.2%.
As of Oct. 5, fewer than 300 of Domino’s international locations are temporarily shuttered. During the quarter, the company permanently closed 126 restaurants, primarily in India. Domino’s added 83 net new locations. In early September, Domino’s had 17,256 locations worldwide.
In the second quarter, due to the uncertainty caused by the crisis, Domino’s borrowed $158 million under its variable funding notes. It has since repaid that debt.
Read the full earnings release.
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