Domino’s Pizza Inc (DPZ.N) reported better-than-expected quarterly revenue and profit, boosted by store openings, lower food costs and higher supply chain revenues from franchises.
Same-store sales at company-owned outlets in the United States, Domino’s biggest source of store revenue, jumped 11.2 percent in the second quarter, crushing the 7.70 percent rise analysts polled by research firm Consensus Metrix had expected.
The company’s supply chain revenue, through which it supplies franchisees ingredients and equipment and accounts for almost 67 percent of total revenue, rose 15 percent to $390.1 million.
The company’s results are in contrast to Yum Brands Inc’s (YUM.N) Pizza Hut division, which has been struggling to deliver same-store sales growth for four quarters.
Domino’s international same-store sales rose by 2.6 percent, but was below the company’s expectations, Chief Executive J. Patrick Doyle said in a statement. Analysts polled by Consensus Metrix had expected international same-restaurant sales to rise 5 percent.
In the United Kingdom, where its franchise Domino’s Pizza Group Plc (DOM.L) is the country’s biggest pizza delivery firm, like-for-like sales growth in the first half of the year was much lower than last year, sending the franchise’s shares tumbling 8 percent on Tuesday.
Weakness in its international business sent shares of Domino’s down 1.9 percent in premarket trade on Tuesday.
Net income rose to $65.7 million, or $1.32 per share, in the quarter ended June 18, from $49.3 million, or 98 cents per share, a year earlier.
Domino’s said the adoption of a new accounting standard in the first quarter boosted profit by 21 cents per share in the latest reported quarter.
The company’s revenue rose 15 percent to $628.6 million, marking its fifth straight double-digit quarterly growth in percentage terms.
Analysts on average had expected a profit of $1.23 per share and revenue of $614.4 million, according to Thomson Reuters.
Domino’s international outlets totaled 8,601 units, while in the United States it had 5,399 restaurants at the end of the quarter, Reuters reports
