Domino's Pizza Inc (DPZ, Financial) released its third quarter 2023 financial results on October 12, 2023. Despite the closure of the Russia market and a slight decline in U.S. same store sales, the company reported a global retail sales growth of 4.9% and a significant increase in diluted EPS.
Financial Highlights
Domino's Pizza Inc (DPZ, Financial) reported a global retail sales growth of 4.9% in Q3 2023, excluding the positive impact of foreign currency. The company also noted a 5.1% growth when excluding the impact of foreign currency and the closure of the Russia market. However, U.S. same store sales declined by 0.6% during the same period.
The company's diluted EPS for Q3 2023 was $4.18, marking a 49.8% increase over the prior year quarter. Despite a global net store decline of 8 stores, the company saw a net store growth of 135 when excluding the closure of the Russia market.
Challenges in Russia
During Q3 2023, the company's master franchisee in Russia announced its intent to file for bankruptcy, leading to the closure of 143 net Domino's stores in Russia. As a result, the company has excluded the impact of the Russia market from its fiscal 2023 statistical measures.
Future Outlook
Based on the results for the three fiscal quarters of 2023, the company expects its 2023 global net store growth to trend at or slightly below the low-end of its 5% to 7% two- to three-year outlook. Additionally, the company expects its 2023 global retail sales growth, excluding foreign currency impact, to trend modestly below the mid-point of its 4% to 8% two -to three-year outlook.
Share Repurchases and Liquidity
During Q3 2023, the company repurchased and retired 229,860 shares of common stock for a total of $90.0 million. As of September 10, 2023, the company had a total remaining authorized amount for share repurchases of $199.5 million.
As of September 10, 2023, the company had approximately $80.9 million of unrestricted cash and cash equivalents, $4.99 billion in total debt, and $277.8 million of available borrowing capacity under its 2021 and 2022 variable funding notes, net of letters of credit issued of $42.2 million.
Conclusion
Despite the challenges faced in the Russia market, Domino's Pizza Inc (DPZ, Financial) has managed to maintain a positive growth trajectory in Q3 2023. The company's focus on sustainable growth and technological innovation has contributed to its financial performance, and it remains optimistic about its future prospects.
