On July 16 before the market opened, Domino's Pizza Inc. (DPZ, Financial), a popular pizza chain based in Ann Arbor, Michigan, reported stronger-than-expected earnings and revenue for the second quarter of 2020, citing positive comps growth in the U.S. as more customers ordered pizza delivery during the Covid-19 pandemic.
By the numbers
The pizza chain posted earnings per share of $2.99 for the quarter, which jumped 36.5% from the prior-year quarter and also surpassed Refinitiv’s consensus estimates of $2.24. Revenue grew 13.4% to $920 million, which was above analysts' expectations of $911.5 million.
Domino’s CEO Ritch Allison said the following on the earnings report:
"Our focus as a global brand and the commitment of our local operators remains steadfast on serving our customers and our communities with a convenient, affordable and safe food and service experience. I have never been more proud of our system of franchisees, operators and corporate team members for their continued passion and innovative spirit, which was evident during the second quarter."
Comparable store sales
Despite stiff competition from third-party delivery services like DoorDash and UberEats, Domino’s witnessed strong same-store sales growth of 16.1% in the U.S., including company-owned and franchise stores. Worldwide comps, barring foreign currency translation, inched up 1.3%.
The second quarter marked the 37th straight quarter of positive domestic same-store sales growth and the 106th quarter of consecutive international comps growth.
Store details
In the second quarter, the company opened 84 net new stores, of which net 39 were in the U.S. and 45 were net new international locations.
At one point during the quarter, the company had as many as 2,400 international locations closed on account of the coronavirus pandemic. As of July 8, less than 600 international stores were shut down temporarily.
Financials
At the end of the quarter, the company had unrestricted cash and cash equivalents of $248 million and total debt of $4.17 billion.
Although most companies refrained from paying dividends due to the pandemic, the Board of Directors of Domino’s declared a dividend of 78 cents per share payable to shareholders on Sept. 30.
Guidance
The company has not provided guidance, citing uncertainty caused by the Covid-19 pandemic.
Disclosure: I do not hold any positions in the stocks mentioned.
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