Industry News | July 25, 2017 | By Danny Klein | QSR Exclusive Brief

Domino's Domestic Sales Continue to Sizzle

While Domino's international sales weren't as high as expected, the domestic gains blew away Wall Street expectations. flickr: Mr. Blue MauMau
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Domino’s surge to the top of the domestic pizza mountain continued Tuesday as the sizzling brand crushed Wall Street expectations yet again, this time delivering domestic same-store sales gains of 9.5 percent—the brand’s 25th consecutive quarter of positive momentum.

Domino’s second-quarter results included international same-store sales growth of 2.6 percent and diluted earnings per share of $1.32, up 34.7 percent from the prior year quarter.

“It was another outstanding quarter for our domestic business, as brand momentum, strong execution and emphasis on getting better each day continued to drive what we do," says J. Patrick Doyle, Domino's president and chief executive officer, in a statement.

Company-owned domestic stores jumped a healthy 11.2 percent in the second quarter, which sailed past Consensus Metrix estimates of 7.7 percent. Domino’s net income of $65.7 million ($1.32 per share) easily topped the FactSet EPS consensus of $1.23 per share.

Revenue also rose to $628.6 million, up from $547.3 million last year, also beating FactSet’s $610 million estimate.

Shares of Domino’s are up more than 34 percent for the year as the company charges ahead.

If there was one blemish, however, it came with Domino’s mild international growth. The 2.6 percent boost marked 94 consecutive quarters of same-store growth overseas, but it wasn’t quite the boon Domino’s expected.

“While international same store sales growth was slightly under our expectations, we remain very confident in our continued ability to generate best-in-class growth, and are encouraged by the strong store growth we are seeing from our international franchisees," Doyle says in a statement.

Domino’s also reported revenue increase of 14.8 percent in the second quarter versus the prior year period, which it credited “primarily to higher supply chain revenues from increased volumes. Higher same store sales and store count growth in both our domestic and international markets also contributed to the increase in revenues.”

Domino’s enjoyed global net store growth of 217 stores, including 39 net in the U.S. and 178 internationally. The company has added 1,281 net new stores over the trailing four quarters.

The chain’s strong showing follows a bullish first quarter that saw domestic same-store sales skyrocket 10.2 percent year-over-year and EPS rise 41.6 percent to $1.26.

"As a work-in-progress brand, we will always remain focused on areas we can improve—but I am extremely pleased that our steady strategy, solid fundamentals and strong alignment with franchisees and operators had us well positioned to sustain success and win," Doyle says in a statement.

Domino’s remains at the forefront of user-friendly technology in the pizza game. In the first quarter, the brand said it was testing GPS-tracking technology and continuing to enhance its delivery service. Domino’s rolled out some interesting promotions in recent months, including discounting online orders 50 percent during the second week of July to celebrate “its appreciation of cows and all things dairy.”

The chain also unveiled Bread Twists as a side item in late June. The new items come in three flavors: Parmesan, Garlic or Cinnamon. Domino’s took to Facebook Live to broadcast “Ferris Bueller’s Day Off” for its first National Movie Night on June 11. In a partnership with EPIX, Domino’s streamed the iconic film live on social media for guests to watch and connect with each other.

Additionally, Domino’s announced in May that it was teaming up with IFTTT, known as If This, Then That, a digital platform that connects services through conditional statements called Applets. It allowed Domino’s to connect ordering with daily life. For example, guests could schedule their porch lights to flip on when a pizza order was placed, or to turn off the sprinklers and start the automatic vacuum. They could even turn on the TV and begin a song once the pizza went in Domino’s oven.

“… we’re empowering customers to unleash their imagination as they create new ways to integrate some of our favorite innovations, like Domino’s Tracker, into their everyday lives,” Dennis Maloney, Domino’s senior vice president—chief digital officer, said at the time.