Domino’s shares hit record as profits beat expectations

Shares in Domino’s Pizza hit a record high after the company reported better-than-expected quarterly sales and profit, helped by store openings and a jump in revenue from the services and products it provides to franchisees.

The company’s shares rose as much as 6.3 per cent to a record high of $145.52 in morning trading on Thursday.

Most of Domino's outlets are operated by franchisees, who pay the company for such things as dough and ovens. Outlets The Michigan-based company said a net 215 Domino's outlets were opened outside the US in the three months ended June 19th, all of them franchised. A net 28 outlets were opened in the US, none company-owned.

Domino’s had 12,692 stores globally as of March 27th, out of which 7,691 were franchises outside the US.

Same-store sales at company-owned outlets in the US – Domino’s biggest source of store revenue – rose 9.1 per cent, outpacing the 5.7 per cent average forecast of analysts polled by research firm Consensus Metrix.

Total international sales jumped 12.4 per cent in the quarter, while total US sales rose 12 per cent. Sales at international outlets open for at least a year rose 7.1 per cent.

Domino's has been outperforming rivals in the US, helped by investments to take advantage of technologies such as smart watches, digital wallets and apps that make it easy for customers to place and pay for orders. Rivals Revenue from Domino's supply chain business, through which it supplies franchisees, rose 12 per cent in the quarter. The business contributed some 60 per cent of the company's total revenue.

Domino’s net income rose to $49.3 million, or 98 cents per share, in the quarter, from $45.9 million, or 81 cents per share, a year earlier. Analysts on average had expected earnings of 94 cents per share, according to Thomson Reuters I/B/E/S.

Total sales rose 12 per cent to $547.3 million, beating the average analysts’ estimate of $533.4 million. – (Reuters)