Earnings

Domino’s quarterly sales surge but pandemic costs hit earnings; shares tumble

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.

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 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

This is a breaking news story. Please check back for updates.

Products You May Like

Articles You May Like

The London Mural Festival is open! Explore the map of London’s new Murals
U.S. reports more than 71,600 new Covid cases as new infections near record highs and hospitalizations rise
Arsenal 0-1 Leicester City: Jamie Vardy scores to give Foxes win
Companies plan to continue shifting supply chains out of China under Biden or Trump, says PwC exec
Dow futures fall more than 100 points after U.S. coronavirus cases surge to record high

Leave a Reply

Your email address will not be published. Required fields are marked *