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International business helps ease pain at Domino's
February 23, 2009
ANN ARBOR, Mich. – Same-store sales at domestic Domino's restaurants fell 3 percent for the fourth quarter ended Dec. 28 and fell 4.9 percent for the year, the company has announced.
Comps at domestic company-owned stores fell 2.2 percent for the quarter and 2.2 percent for the year, while comps at domestic franchise stores fell 3.1 percent for the quarter and 5.2 percent for the year.
Comps at international locations increased 4.5 percent for the quarter and 6.2 percent for the year.
This marked the 60th consecutive quarter of international same store sales growth for the company. The International division has grown to comprise more than 40 percent of Domino's global retail sales.
Revenues for the quarter were $428.2 million, off 4 percent compared with revenues of $445.9 million for the 2007 fourth quarter. Revenues for the year were $1.43 billion, off slightly from revenues of $1.46 billion for 2007.
Net income for the quarter was $11 million, off 32 percent compared with net income of $16.2 million for the fourth quarter of 2007. Net income for the year was $54 million, up 42 percent compared with net income of $37.9 million for the previous year.
"I have mixed feelings about our overall results," said Domino's CEO David A. Brandon. "I am disappointed with our domestic sales performance and the pressure this created on our short-term profits. The current economic crisis has been challenging and at times, painful. However, I am convinced we will come out of this a stronger brand, stronger system of stores, and a stronger company."
Domino's does not provide quarterly or annual earnings estimates or guidance. However, the company has made the following set of assumptions for 2009:
- Flat domestic same store sales
- Net negative domestic store growth
- Targeted general and administrative investments
- Lower commodity costs and the benefit of a 53rd week
- Capital expenditures at the lower end of the stated $20 million to $30 million range estimate
- Significant negative impact on royalties from foreign currency movements
- Net positive international store growth, resulting in global net store growth in the 175 to 225 range.
"As it relates to the current situation, there seems to be no consensus on where the general economy is going, making forecasting riskier than ever before," Brandon said. "We will make decisions with a long-term view, while executing a conservative 2009 budget plan."
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