Intl. sales at Domino's Pizza overcome weak U.S. sales for positive Q1 ''03

May 5, 2003

ANN ARBOR, Mich. -- Positive performance at Domino's, Inc.'s international stores overcame domestic store same-store sales declines in the company's first quarter of 2003, which ended March 23.

According to a news release, system-wide sales rose 3 percent to a record $976.3 million on the heels of an international same-store sales boost of 4.4 percent (on a constant dollar basis). Domino's international comparable-store sales have risen for 37 consecutive quarters.

Domestic comp-store sales were down 1.1 percent, however, due to sales decreases of 0.4 percent at franchise stores and 5.6 percent at company stores.

In the release, the company attributed the declines to "a continued weak economic climate, hesitant consumer spending and continued competitive pressures."

The comparable period in 2002 saw domestic comp-sale increases of 7.6 percent.

Net income for Q1 '03 rose 15.3 percent to $18.3 million, and earnings before interest, taxes, depreciation and amortization (EBITDA) increased 8.9 percent to a record $49.8 million.

In the release, the company said EBITDA gains were helped by reductions in cheese prices and general and administrative expenses (specifically reduced administrative labor), as well as distribution volume increases.

"Achieving record results during this period of economic uncertainty and soft sales is significant," said Domino's chairman and chief executive officer David A. Brandon. "We benefited not only from lower than expected cheese costs during the quarter, but from the growth in our worldwide store counts."

As of the end of the quarter, there were 7,253 Domino's Pizza stores operating worldwide, a net increase of 177 stores over the trailing 12 months.

Topics: Financial Management

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