Operations
Domino's Q2 earnings leave analysts expectations in the dust
July 22, 2021
Strong international and U.S. sales growth propelled Ann Arbor, Michigan-based Domino's Pizza into Q2 earnings results of $3.12 per share, exceeding expectations of Zacks and others in the range of $2.85 per share, as well as the $2.99 per share performance it turned in last year's quarter. In fact, this kind of trouncing of earnings-per-share estimates is getting to be "old hat" for Domino's, which has beaten consensus EPS the last four quarters, according to previous reports and the company's current earnings release.
Domino's Q2 revenues also surpassed those of last year's quarter, with the company indicating revenues of $1.03 billion Q2 2021, compared with $920 million last year's quarter.
Other key highlights for the quarter that ended July 20, 2021, include:
- Global retail sales growth (excluding foreign currency impact) of 17.1%.
- U.S. same-store sales growth of 3.5%.
- International same-store sales growth of 13.9%.
- Global net store growth of 238.
- Diluted EPS up 2.3% to $3.06.
This month, Domino's also said that it completed a $1 billion accelerated share repurchase transaction
"I am very pleased with our strong global retail sales and store growth momentum during the second quarter, which demonstrated the power of our investments in innovation, our focus on food quality and superior service, and our dynamic franchisees who are dedicated to serving their local neighborhoods," Domino's CEO Ritch Allison, said in the release. "Given our current operating environment, we are watching our two-year sales trends anchored to pre-COVID fiscal 2019 results. I am pleased that in the second quarter our cumulative two-year same stores sales were up 19.6% domestically and 15.2% internationally, signifying meaningful and sustained growth."
In connection with the company's recapitalization transaction, as further discussed below, the company borrowed $1.85 billion, and used a portion of the proceeds to repay its remaining debt under its 2017 five-year fixed rate and 2017 five-year floating rate notes. The company also entered into a $1 billion accelerated share repurchase agreement (the "ASR Agreement") with a counterparty, which was completed subsequent to the end of the second quarter.
In connection with the ASR Agreement, the company received and retired a total of 2,250,786 shares of its common stock at an average price of $444.29, including 2,012,596 shares of its common stock received and retired during the second quarter.
Subsequent to the end of the second quarter, Domino's board authorized a new share repurchase program to repurchase up to $1 billion of its common stock. Also on July 20, the board declared a 94-cent-per-share quarterly dividend on its outstanding common stock for shareholders of record as of Sept. 15, to be paid on Sept. 30.
