News

2016 results in, Domino's asks, ''What downturn?''

February 28, 2017

What's the potential value of acknowledging your mistakes and doing the hard work to solve them? Domino's can tell you. Or, better yet, the market can show you, in the form of the pizza delivery chain's soaring value, including a 38 percent increase in share value over the last year, according to 2016 financial results released this morning. 

The pie-making overachiever has managed to beat even the rosy predictions by analysts that its U.S. same store sales would grow 10 percent in the last quarter of last year, instead increasing 12.2 percent over that period, according to a news release. And internationally, the chain's same store sales bumped up 4.3 percent. 

To this, add 559 new stores in 2016 (bringing the current total to more than 13,800 worldwide), plus revenues and EPS that exceeded expectations with a dividend of 46 cents per share (up 21.1 percent from the previous quarter), and you have the makings of a great turnaround story.

The fourth quarter of 2016 was the chain's 92nd consecutive quarter — that's 23 years — of positive international same store sales growth and the 23rd consecutive quarter of positive domestic same store sales growth, according to the release. 

"I'm extremely proud of our franchisees and operators worldwide, including those who contributed toward back-to-back years of double-digit sales growth in the U.S.," Domino's President and CEO J. Patrick Doyle said in a news release. "While these unprecedented results speak for themselves, I am most pleased with the passion and energy we demonstrated throughout 2016 in meeting the challenge of sustained success. The momentum and alignment within our system has never been stronger."

Q4 and fiscal 2016 highlights

• Revenues rose 10.6 percent in the fourth quarter vs. the prior year period, due primarily to higher supply chain volumes, as well as higher revenues in company-owned store and domestic and international franchises.
• Net income grew 15.9 percent for Q4 vs. the same period in 2015, driven by an increase in store count and same store sales growth, as well as higher supply chain volumes.
• Diluted Q4 EPS was $1.48  vs. $1.18 in Q4 2015, representing a 30 cent (25.4 percent) increase over the prior year quarter. Diluted EPS increased 33 cents or 28.7 percent from $1.15 in Q4 2015, driven by the increase in net income, as well as lower diluted share count, primarily as a result of ongoing share repurchases.