Domino’s reports mixed third-quarter results as U.S. same-store sales increase

Domino’s Pizza reported better-than-expected revenue for the third quarter Thursday and stood by its forecast for food cost inflation this year, even though earnings fell short of estimates.

In the U.S., the company said same-store sales rose 2%. Domino’s has been struggling to meet the higher demand levels during the earlier days of the Covid-19 pandemic, when people were hunkering down at home and ordering in more.

Domino’s also stood by its forecast for food cost inflation, indicating that pressure from rising costs could be easing. In the previous quarter, the company had hiked its forecast for food cost inflation to be up 13% to15%, from its previous estimate for an increase of 10% to 12%.

Shares of Domino’s were up over 8% in pre-market trading.

“I’m encouraged with our performance and the sequential improvements we made during the third quarter,” Domino’s CEO Russell Weiner said in a statement.

He also said the company delivers around one out of every three pizzas in the U.S. today − similar to before the pandemic.

Here’s how the pizza company performed compared with Wall Street estimates, according to Refinitiv:

• Earnings per share: $2.79, adjusted vs. $2.97 expected.
• Revenue: $1.07 billion vs. $1.06 billion expected.

Overseas, the company said same-store sales declined 1.8% in the third quarter when excluding the impact of foreign currency exchanges.

The company also said it sold 114 company-owned stores in Arizona and Utah to its franchisees for $41.1 million after the third quarter ended. It said it expects to record a gain from transaction in the fourth quarter.

For the quarter ended Sept. 11, net income fell to $100.5 million, 0r $2.79 a share, from $120.4 million, or $3.24 a share a year ago. Domino’s attributed the drop primarily to a higher provision for income taxes and lower income from operations.

Domino’s has been hurt by rising costs and an ongoing shortage of delivery drivers that has dented sales. Shares of the Ann Arbor, Michigan-based company hit a 52 week low on Wednesday, trading at $299.41 per share. It traded as high as $567 within the last year.

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