ANN ARBOR, Mich. - Domino's Pizza, Inc. (NYSE: NYSE:DPZ), the world's largest pizza company, reported second-quarter earnings that surpassed analyst expectations, while revenue was in line with forecasts. Shares were down 6% following the report.
The company announced an adjusted EPS of $4.03, $0.38 higher than the analyst estimate of $3.65 for the quarter. Revenue was reported at $1.1 billion, meeting the consensus estimate.
Domino's witnessed a global retail sales growth of 7.2%, excluding foreign currency impact, and a notable U.S. same-store sales growth of 4.8%. International same-store sales, also excluding foreign currency impact, grew by 2.1%. The company's overall income from operations saw a slight increase of 0.4%; however, when accounting for the negative impact of foreign currency exchange rates on international franchise royalty revenues, the increase was a more substantial 1.7%.
The company's CEO, Russell Weiner, commented on the strong performance, "Our year-to-date performance demonstrates that our Hungry for MORE strategy is off to a great start, having an immediate impact on sales and profits." He attributed the success to the company's ability to drive U.S. comp performance through profitable order count growth, which was positive across delivery and carryout businesses and all income cohorts.
Domino's also reported a net income increase of 29.8% to $142.0 million for the quarter, compared to the same period last year. Diluted earnings per share (EPS) rose by 30.8% to $4.03. Additionally, the company experienced a 7.1% revenue increase compared to the second quarter of the previous year, primarily due to higher supply chain, U.S. franchise advertising, and U.S. franchise royalties and fees revenues.
Looking ahead, Domino's provided long-term guidance for the period from 2024 to 2028, projecting over 7% annual global retail sales growth and over 8% annual income from operations growth. However, the company now expects global net store growth to be between 825 to 925 in 2024, with the U.S. continuing to anticipate 175+ net stores annually. International growth projections have been adjusted due to challenges faced by Domino's Pizza Enterprises, with expectations to fall 175 to 275 stores below the 2024 goal of 925+ net stores. Consequently, the company is temporarily suspending its guidance of 1,100+ global net stores until the full impact of these challenges is known.
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