Domino's Pizza Sales Advance On U.S. Price Hikes, Reiterates Food Costs Increases

Scott Peters
13 Oct, 2022
New York City

Domino's Pizza Inc sizzled 9.8% to $331.42 after the company said revenue in its latest quarter increased 7.1% to $1.07 billion.

 Net income declined to $100.5 million from $120.4 million a year ago. 

Revenue increase was largely driven by 4.1% price hike at the company owned stores and similar increases charged to stores owned by franchisees. 

Same store sales at U.S. locations increased 2.0%, driven by 2.2% increase in franchised stores offset by 1.9% decline at company owned stores. 

Same store sales at international locations declined 1.8%, excluding foreign currency impact. 

Total global retail sales fell 1.6%, driven by 4.1% increase at the U.S. locations offset by 6.8% decline at international locations. 

Diluted earnings per share fell to $2.79 from $3.24 a year ago. 

 

Outlook and Guidance 

The company lifted its estimate of the negative impact of changes in foreign currency exchange rates on royalty revenues in the range between $29 million and $31 million from $22 million and $26 million. 

The company plans to cut its capital expenditure to $100 million from the previous estimate of $120 million. 

General and administrative expenses the current year are estimated to fall between $415 million and $420 million from the previous estimate between $420 million and $428 million.  

The company reiterated its price increase outlook for the current year across all products between 13% and 15%. 

 

Free Cash Flow 

Net cash provided by operating activities was $330.2 million during the three fiscal quarters of 2022 and the company invested $50.5 million in capital expenditures in the period. 

Free cash flow was approximately $279.6 million during the three fiscal quarters of 2022.  

 

Liquidity and Long Term Debt

Long term debt at the end of the quarter was $5.2 billion. 

At the end of the quarter as of September 11, 2022, the company had $114.8 million of unrestricted cash and cash equivalents. 

The borrowing capacity available at the end of the quarter was $35.8 million under its 2021 Variable Funding Notes, net of $120.0 million of outstanding  borrowings and letters of credit issued of $44.2 million.

Subsequent to the end of the third quarter, the company repaid $60.0 million of its outstanding borrowings under its 2021 Variable Funding Notes and entered into the 2022 Variable Funding Notes facility which provides for an additional $120.0 million of borrowing capacity. 

 

Stock Repurchase and Dividend 

During the third quarter of 2022, the company repurchased and retired 490,789 shares of common stock for a total of $196.1 million. 

As of September 11, 2022, the Company had a total remaining authorized amount for share repurchases of $410.4 million. 

On October 11, 2022, the Board of Directors declared a $1.10 per share  quarterly dividend to shareholders of record as of December 15, 2022 to be paid on December 30,  2022. 

 

Store Network 

During the quarter, the company owned stores increase by one to 402 and franchisee added 23 increasing the count to 6,241, totaling U.S. stores to 6,643. 

In the third quarter, International stores increased 201 to 12,876.  

In the quarter, the net store increased 225 to 19,519.