Domino's Pizza 1Q net income up, tops expectations
ANN ARBOR, Mich.—Domino's Pizza Inc.'s fiscal fourth-quarter profit rose 28 percent as sales improved in the U.S. and abroad.
The pizza chain's earnings beat Wall Street's expectations and its stock surged more than 13 percent in afternoon trading.
Domino's reported Tuesday that its net income rose to $30.9 million, or 52 cents per share, for the period ended Jan. 1, up from $24.2 million, or 39 cents per share, a year ago.
Analysts expected earnings of 49 cents per share, on average, according to a FactSet survey.
Domino's stock gained $4.60, or 13.7 percent, to $38.15 in afternoon trading after rising to a 52-week high of $38.40 earlier in the session.
Revenue rose 5 percent to $501.7 million from $480 million, but that was short of Wall Street's estimate of $514.1 million.
Revenue at U.S. stores open at least a year jumped 6.8 percent, while the figure rose 4.7 percent overseas. This metric is a key indicator of a restaurant operator's health because it excludes results from stores recently opened or closed.
Domino's Pizza said its full-year earnings rose 20 percent to $105.4 million, or $1.71 per share, from $87.9 million, or $1.45 per share, in the prior year. Annual revenue increased 5 percent to $1.65 billion from $1.57 billion.
Revenue at U.S. stores open at least a year rose 3.5 percent and gained 6.8 percent abroad.
Domino's raised the high end of its long-term guidance for revenue at international locations open at least a year. The Ann Arbor, Mich., chain expects a 3 percent to 6 percent increase, compared with a previous forecast for a 3 percent to 5 percent rise. The company maintained its long-term outlook for revenue at U.S. stores open at least a year to be up 1 percent to 3 percent.
Domino's also said Tuesday that some of its subsidiaries plan to refinance outstanding debt. The company said in April 2007 that some of its subsidiaries entered a $1.85 billion securitized financing facility. The outstanding securitized debt balance was $1.45 billion as of Jan. 1.
Domino's said it plans to replace this facility with a new one that will likely include about $1.48 billion fixed rate notes and $200 million variable funding notes. The original facility included $1.7 billion fixed rate notes and $150 million of variable funding notes.
The new facility's proceeds will help repay the 2007 notes fully and be used for general corporate purposes such as a special dividend and buybacks. The notes offering is expected to close in the first quarter.
Domino's had 9,742 franchised and company-owned stores in the U.S. and more than 70 international markets as of the fourth quarter.