Domino’s beats expectations at home and overall, but lags overseas
Domino’s Pizza reported earnings this week that show a 33% rise in profit during its second quarter due to rising demand at home. However, sales overseas were a weak spot for the brand, which has historically performed well across multiple regions. According to J. Patrick Doyle, Domino’s CEO, weakness in the UK market was a prime driver of the brand’s poor showing internationally.
While the company continued to see a rise in sales outside of America, it came in at far less than analysts had hoped for: 2.6%, year-over-year, against expectations of 5.1%. This is also far less than the 7.1% increase the company reported internationally over the same period last year. Thankfully, the company’s domestic sales made up for it.
In its domestic market, Domino’s managed to deliver a 9.5% rise in sales against the same period last year. This easily beat the Street’s prediction of 7.9%, and helped to generate a significant rise in profit. Earnings per share came in at $1.32 on a net income of $65.7 million for the quarter. This beat analysts’ expectations of $1.22 per share, and it was considerably higher than last year’s $0.98 on a net income of $49.3 million. Revenues rose 15% to $628.6 million, overshooting expectations of $613.4 million.
Turning back to the company’s poor performance overseas, Doyle said that the numbers reported “weren’t exactly the type of results we’ve all come to expect within this high-performing business segment.” He said that the company was working on a number of remedies for the situation, including attempting to get more Brits to order pizza online.
Dominion holds Domino’s Pizza in its Global Trends Managed Fund.
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