Domino’s Pizza Inc.’s
third-quarter revenue rose 7.1%, as higher sales from its U.S. restaurants offset a decline from international outlets due to the stronger dollar.
The Ann Arbor, Mich.-based pizza chain said its top line climbed to $1.07 billion, just above analysts’ expectations, with sales from existing stores up 2% in the U.S. from a year earlier but down 1.8% overseas.
The company said higher prices lifted its sales and managed to offset a drop in international franchise royalties and fees revenues. International retail sales would have grown 5.2% during the quarter had it not been for the weakening of foreign currencies against the dollar, which cost the company about $7.9 million, Domino’s said.
The company’s profit shrunk by 16.5% to $100.5 million, or $2.79 a share, driven lower by higher taxes and tighter margins. Analysts polled by FactSet had been expecting $2.97 a share.
Domino’s is among the first major restaurant chains to report earnings this season. Bigger chains such as McDonald’s Corp. and Chipotle Mexican Grill Inc. will post their performances later this month, while rival Papa John’s International Inc. is set to deliver results in early November.
Some Wall Street analysts have been bracing for pizza sellers to underperform other restaurant categories in the latest quarter.
analysts said in a research note last month that pizza consumption has weakened due to a lack of delivery drivers, more other takeout and delivery options, and a general sense of customer fatigue toward pizza.
This time a year ago, Domino’s reported its first U.S. same-store sales decline in more than a decade, reversing from a run of growth earlier in the pandemic when the mass closure of restaurant dining rooms spurred a flood of delivery and takeout orders.
Domino’s shuffled its management team the following spring, promoting then-chief operating officer Russell Weiner to replace Ritch Allison as chief executive and tapping Sandeep Reddy, former chief financial officer of
Six Flags Entertainment Corp.
, to take over as its finance chief.
The chain has struggled with staffing shortages this year, particularly among delivery drivers, and equipment delays that have hampered its ability to open new stores in the U.S., which has been a key part of its growth strategy.
Hoping to offset growing costs, the company has changed its longtime promotion that offered two value items for $5.99 to now include an extra dollar per item if the order is delivered rather than picked up at stores.
Write to Dean Seal at [email protected]
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Appeared in the October 14, 2022, print edition as ‘Domino’s Results Get a Boost From Brisk U.S. Business.’