On April 29, 2024, Domino's Pizza Inc (DPZ, Financial), the world's leading pizza company, disclosed its financial results for the first quarter of 2024, demonstrating significant growth and operational success. The company released its 8-K filing, revealing a 7.3% increase in global retail sales (excluding foreign currency impact), with a notable 5.6% growth in U.S. same-store sales and a more modest 0.9% rise in international markets.
Company Overview
Domino's Pizza Inc operates and franchises approximately 20,600 stores worldwide across more than 90 countries. The company's revenue streams include sales from company-owned stores, royalties, and marketing contributions from franchised stores, along with its network of dough manufacturing and supply chain facilities in the U.S. and Canada. With $18.3 billion in system sales in 2023, Domino's leads the global pizza market.
Financial Performance Highlights
For Q1 2024, Domino's reported a robust increase in income from operations by 18.6%, adjusting for a $1.4 million negative impact from foreign currency exchange rates, the increase was 19.4%. This growth was driven by higher U.S. franchise royalties and fees, and improvements in supply chain gross margins. Notably, net income rose by 20.1% to $141.14 million, surpassing the estimated net income of $120.04 million projected by analysts.
Revenue for the quarter reached $1,138.14 million, a 5.9% increase from the previous year, primarily due to higher supply chain revenues and U.S. franchise royalties and fees. This figure also exceeded analyst expectations of $1,078.94 million. The diluted earnings per share (EPS) stood at $3.58, outperforming the estimated EPS of $3.39.
Operational Success and Strategic Initiatives
Russell Weiner, CEO of Domino's, highlighted the success of the company's 'Hungry for MORE' strategy, which focuses on expanding sales, store count, and profitability. Key drivers included the enhanced Domino's Rewards loyalty program and positive order growth across all income cohorts in the U.S. The company also initiated marketing on Uber Eats, projecting sales from this channel to reach 3% by year-end.
Internationally, despite the geopolitical challenges, including the exclusion of the Russian market from its future store count and sales projections, Domino's managed a steady performance. The company continues to focus on increasing franchisee profitability and store growth.
Future Outlook and Shareholder Returns
Looking forward, Domino's reaffirmed its long-term guidance, expecting over 7% annual global retail sales growth and significant store expansion. The Board of Directors declared a quarterly dividend of $1.51 per share, underscoring the company's strong cash flow and commitment to returning value to shareholders. Additionally, Domino's repurchased $25 million worth of shares in the first quarter, with $1.12 billion remaining under its current repurchase authorization.
This comprehensive performance not only demonstrates Domino's resilience but also its ability to adapt and thrive amidst varying market conditions, reinforcing its market leadership and offering promising prospects for investors.
For detailed financial tables and further information, please refer to the full earnings release on Domino's investor relations website.
Domino's will host a conference call to discuss the quarterly results and provide additional insights into its strategies and outlook. Interested parties can access the call through Domino's investor relations website.
###Explore the complete 8-K earnings release (here) from Domino's Pizza Inc for further details.
