News

Profit strong, but 3Q U.S. comps weak at Domino's Pizza

October 24, 2005

ANN ARBOR, Mich. — After posting two red-hot quarters in 2005, Domino's Pizza reported considerably cooler comparable-store sales for its third quarter, ended Sept. 11.

According to a regulatory filing, comps at its U.S. stores increased a modest 1.1 percent (reflecting a corporate-unit increase of 4.2 percent and a franchise-unit increase of 0.7 percent) for the period, while international comps rose 4.5 percent on a constant-dollar basis. The No. 2 pizza chain was lapping strong domestic and international same-store sales — 8 percent and 5.9 percent, respectively — posted in the same period last year.

For the year, Domino's domestic comps are up 6.3 percent.

For 3Q '05, the chain posted net income of $20.8 million on revenues of $337.5 million. In 3Q '04, its net income was $1 million on $325 million in revenues.

"Both our domestic and international businesses drove positive same-store-sales growth, which was particularly noteworthy, considering our extremely strong sales performance in the same period last year," said Domino's Pizza chairman and chief executive David Brandon. "Together with lower cheese costs and healthy store growth, we were pleased to drive (earnings per share) growth of more than 30 percent."

Brandon also complimented the actions of Domino's operators who rushed to the Gulf Coast region to help reopen stores closed by Hurricane Katrina.

"Our largest domestic franchisee, RPM Pizza, is located in the center of Katrina's devastation, and many of our franchisees and team members displayed incredible acts of selflessness by traveling to RPM Pizza locations throughout Mississippi and Louisiana and helping them get most of their stores reopened in a remarkably short period of time," Brandon said. "In addition, we were privileged to provide free, hot food to thousands of evacuees and rescue workers during the weeks immediately following the storms." (Read also HURRICANE KATRINA: Regrouping, rebuilding and reopening.)

Read also 2Q U.S. comps rise 6.9 percent at Domino's Pizza andU.S. Q1 comps up 11% at Domino's Pizza.