Domino's Pizza Inc.
The pizza chain reported earnings of $4.13 per share, slightly below the analyst consensus estimate of $4.28. Revenue rose 3.5% year over year to $1.151 billion but came in just under the Street view of $1.163 billion.
Sales growth was driven by higher supply chain revenue, along with increases in global franchise royalties, fees, and advertising revenue.
Income from operations increased 9.6% from a year earlier to $230.4 million, supported by higher franchise royalties and gross margin dollar growth in the supply chain segment.
Key Operating Metrics
Global retail sales increased 3.4% on a currency-neutral basis, led by a 2.8% rise in U.S. stores and a 4.0% gain internationally.
U.S. same-store sales rose 0.9%, while international same-store sales declined 0.4% on a currency-neutral basis.
A Reuters report said Domino's Pizza missed first-quarter same-store sales estimates as cost-conscious consumers cut back on dining out. Persistent inflation, a weak labor market, and rising transportation costs-linked to Middle East tensions-are pushing more people toward cheaper, at-home meals, weighing on restaurant demand.
Gross margin expanded to 40.4% from 39.8% a year earlier. Supply chain gross margin rose 0.6 percentage points to 12.2%, aided by procurement efficiencies.
The company added a net 180 stores during the quarter, including 19 in the U.S. and 161 internationally.
Chief Executive Officer Russell Weiner said the company remains well-positioned despite a more competitive environment, citing scale advantages and store-level profitability.
"In an intensifying macro and competitive environment, our scale advantage and best-in-class store level profitability uniquely position Domino's in the QSR Pizza category to sustain the value and innovation customers demand," Weiner said.
Cash Flow And Shareholder Returns
Domino's ended the quarter with $232.9 million in cash and equivalents and generated $147.0 million in free cash flow.
On April 21, the company declared a dividend of $1.99 per share, payable June 30 to shareholders of record as of June 15.
During the quarter, Domino's repurchased $75.1 million in shares. As of March 22, $384.6 million remained under its existing authorization.
After the quarter ended, the company repurchased an additional $94.4 million in shares through April 21.
The board also approved a new share repurchase program of up to $1.0 billion. Combined with the remaining authorization of $290.2 million, total buyback capacity stands at $1.29 billion.
DPZ Price Action: Domino's Pizza shares were down 5.80% at $346.50 during premarket trading on Monday. The stock is trading near its 52-week low of $346.31, according to Benzinga Pro data.
