false0001286681DOMINOS PIZZA INC00012866812024-10-102024-10-10

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 8-K

 

CURRENT REPORT PURSUANT TO

SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported) October 10, 2024

 

Domino’s Pizza, Inc.

(Exact Name of Registrant as Specified in Its Charter)

 

 

Delaware

(State or Other Jurisdiction of Incorporation or Organization)

 

 

001-32242

38-2511577

(Commission File Number)

(I.R.S. Employer Identification No.)

 

 

30 Frank Lloyd Wright Drive

Ann Arbor, Michigan

48105

(Address of Principal Executive Offices)

(Zip Code)

Registrant’s telephone number, including area code (734) 930-3030

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Exchange Act:

Title of Each Class

Trading Symbol

Name of Each Exchange on Which Registered

Domino’s Pizza, Inc. Common Stock, $0.01 par value

DPZ

New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 


 

 

Item 2.02. Results of Operations and Financial Condition.

On October 10, 2024, Domino’s Pizza, Inc. issued a press release announcing financial results for the third quarter ended September 8, 2024. A copy of the press release is attached hereto as Exhibit 99.1. The information in this Form 8-K and the Exhibit attached hereto are being furnished pursuant to Item 2.02 of Form 8-K and therefore shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

 

Exhibit

Number

 

Description

 

99.1

 

Domino’s Pizza, Inc. third quarter 2024 financial results press release, dated October 10, 2024.

104

 

The cover page from this Current Report on Form 8-K, formatted in Inline XBRL (included as Exhibit 101).

 

 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

 

DOMINO’S PIZZA, INC.

 

 

 

 

(Registrant)

 

 

 

 

 

 

Date:

 

October 10, 2024

 

/s/ Sandeep Reddy

 

 

 

 

Sandeep Reddy

Executive Vice President, Chief Financial Officer

(Principal Financial Officer)

 

 

 

 

 

 

 

 

 

 

 

 


 

Exhibit 99.1

img153816887_0.jpg

For Immediate Release

Contact: Greg Lemenchick

Vice President - Investor Relations

investorrelations@dominos.com

Domino’s Pizza® Announces Third Quarter 2024 Financial Results

Global retail sales growth (excluding foreign currency impact) of 5.1%

U.S. same store sales growth of 3.0%

International same store sales growth (excluding foreign currency impact) of 0.8%

Global net store growth of 72

Income from operations increased 5.0%; excluding the $1.4 million negative impact of foreign currency exchange rates on international franchise royalty revenues, income from operations increased 5.7%

 

ANN ARBOR, Michigan, October 10, 2024: Domino’s Pizza, Inc. (NYSE: DPZ), the largest pizza company in the world, announced results for the third quarter of 2024.

 

“Our third quarter results once again demonstrated that our Hungry for MORE strategy is resonating, despite a pressured global marketplace,” said Russell Weiner, Domino’s Chief Executive Officer. “In our international business, we are on track for our 31st consecutive year of same store sales growth, demonstrating our sustained long-term track record of success. In the U.S., we drove our 4th straight quarter of profitable order count growth, highlighting that our strategies are driving positive outcomes. The Hungry for MORE pillar of Renowned Value will be the primary focus for our business in near-term as we look to continue to create our own tailwinds around the world. Renowned Value is a competitive advantage for Domino’s and one where we are industry leaders. With the slate of initiatives we have in place, I am confident that we will continue to win and grow our market share across the globe for years to come.”

 

Third Quarter 2024 Operational and Financial Highlights (Unaudited):

 

The tables below outline certain statistical measures utilized by the Company to analyze its performance, as well as key financial results. This historical data is not necessarily indicative of results to be expected for any future period. Refer to Comments on Regulation G below for additional details, including definitions of these statistical measures and certain reconciliations.

 

 

 

Third Quarter

 

 

Three Fiscal Quarters

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Global retail sales: (in millions of U.S. dollars)

 

 

 

 

 

 

 

 

 

 

 

 

U.S. stores

 

$

2,168.4

 

 

$

2,062.8

 

 

$

6,602.5

 

 

$

6,195.0

 

International stores

 

 

2,223.6

 

 

 

2,160.9

 

 

 

6,581.9

 

 

 

6,352.2

 

Total

 

$

4,392.0

 

 

$

4,223.7

 

 

$

13,184.4

 

 

$

12,547.2

 

 

 

 

Third Quarter

 

Three Fiscal Quarters

 

 

2024

 

2023

 

2024

 

2023

Global retail sales growth: (versus prior year period,
   excluding foreign currency impact)

 

 

 

 

 

 

 

 

U.S. stores

 

+ 5.1%

 

+ 0.9%

 

+ 6.6%

 

+ 2.5%

International stores (1)

 

+ 5.1%

 

+ 9.4%

 

+ 6.5%

 

+ 8.9%

Total (2)

 

+ 5.1%

 

+ 5.1%

 

+ 6.5%

 

+ 5.7%

 

 

 

 

 

 

 

 

Same store sales growth: (versus prior year period)

 

 

 

 

 

 

 

 

U.S. Company-owned stores

 

+ 3.1%

 

+ 2.9%

 

+ 5.4%

 

+ 5.2%

U.S. franchise stores

 

+ 3.0%

 

(0.7)%

 

+ 4.4%

 

+ 0.8%

U.S. stores

 

+ 3.0%

 

(0.6)%

 

+ 4.5%

 

+ 1.0%

International stores (excluding foreign currency impact)

 

+ 0.8%

 

+ 3.3%

 

+ 1.1%

 

+ 2.6%

 

 

(1)

 

2024 and 2023 third quarter and three fiscal quarters figures each exclude the impact of the Russia market. Including the impact of the Russia market, international stores retail sales growth, excluding foreign currency impact, was 4.8% and 6.0% for the third quarter and three fiscal quarters of 2024, respectively, and 9.0% and 8.5% for the third quarter and three fiscal quarters of 2023, respectively.

(2)

 

2024 and 2023 third quarter and three fiscal quarters figures each exclude the impact of the Russia market. Including the impact of the Russia market, total global retail sales growth, excluding foreign currency impact, was 5.0% and 6.3% for the third quarter and three fiscal quarters of 2024, respectively, and 4.9% and 5.5% for the third quarter and three fiscal quarters of 2023, respectively.

 

 


 

 

 

U.S. Company-
owned Stores

 

 

U.S. Franchise
Stores

 

 

Total
U.S. Stores

 

 

International
Stores

 

 

Total

 

Third quarter of 2024 store counts:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Store count at June 16, 2024

 

 

289

 

 

 

6,617

 

 

 

6,906

 

 

 

14,024

 

 

 

20,930

 

Openings

 

 

2

 

 

 

22

 

 

 

24

 

 

 

184

 

 

 

208

 

Closings

 

 

 

 

 

 

 

 

 

 

 

(136

)

 

 

(136

)

Store count at September 8, 2024

 

 

291

 

 

 

6,639

 

 

 

6,930

 

 

 

14,072

 

 

 

21,002

 

Third quarter 2024 net store growth

 

 

2

 

 

 

22

 

 

 

24

 

 

 

48

 

 

 

72

 

Trailing four quarters net store growth

 

 

5

 

 

 

163

 

 

 

168

 

 

 

637

 

 

 

805

 

 

 

 

 

Third Quarter

 

Three Fiscal Quarters

(In millions, except percentages, percentage points, per share data and leverage ratio)

 

2024

 

2023

 

Increase/
(Decrease)

 

2024

 

2023

 

Increase/
(Decrease)

Total revenues

 

$1,080.1

 

$1,027.4

 

+ 5.1%

 

$3,262.5

 

$3,076.4

 

+ 6.0%

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Company-owned store gross margin

 

16.8%

 

15.8%

 

+ 1.0 pp

 

17.3%

 

17.1%

 

+ 0.2 pp

Supply chain gross margin

 

10.6%

 

10.0%

 

+ 0.6 pp

 

11.0%

 

9.9%

 

+ 1.1 pp

 

 

 

 

 

 

 

 

 

 

 

 

Income from operations

 

$198.8

 

$189.4

 

+ 5.0%

 

$605.3

 

$562.3

 

+ 7.7%

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$146.9

 

$147.7

 

(0.5)%

 

$414.7

 

$361.8

 

+ 14.6%

Diluted earnings per share

 

$4.19

 

$4.18

 

+ 0.2%

 

$11.80

 

$10.19

 

+ 15.8%

 

 

 

 

 

 

 

 

 

 

 

 

Leverage ratio

 

 

 

 

 

 

 

4.9x

 

5.5x

 

(0.6)x

 

 

 

 

 

 

 

 

 

 

 

 

 

Net cash provided by operating activities

 

 

 

 

 

 

 

$446.9

 

$422.1

 

+ 5.9%

Capital expenditures

 

 

 

 

 

 

 

(70.8)

 

(59.3)

 

+ 19.5%

Free cash flow

 

 

 

 

 

 

 

$376.1

 

$362.9

 

+ 3.6%

 

Revenues increased $52.8 million, or 5.1%, in the third quarter of 2024 as compared to the third quarter of 2023, primarily due to higher supply chain, U.S. franchise advertising and U.S. franchise royalties and fees revenues. The increase in supply chain revenues was primarily attributable to higher order volumes, as well as an increase in the Company’s food basket pricing to stores, but was partially offset by a shift in the relative mix of the products sold by the Company. The Company’s food basket pricing to stores increased 1.3% during the third quarter of 2024 as compared to the third quarter of 2023. U.S. franchise advertising revenues increased as a result of the return to the standard 6.0% advertising contribution rate at the beginning of the second quarter of 2024 following the end of the temporary reduction to 5.75% which began in the second quarter of 2023, as well as higher same store sales and net store growth. U.S. franchise royalties and fees increased as a result of higher same store sales and net store growth.
U.S. Company-owned store gross margin increased 1.0 percentage point in the third quarter of 2024 as compared to the third quarter of 2023, primarily driven by sales leverage due to higher customer transaction counts.
Supply chain gross margin increased 0.6 percentage points in the third quarter of 2024 as compared to the third quarter of 2023, primarily due to procurement productivity.
Income from operations increased $9.4 million, or 5.0%, in the third quarter of 2024 as compared to the third quarter of 2023. Excluding the negative impact of foreign currency exchange rates on international franchise royalty revenues of $1.4 million, income from operations increased $10.8 million, or 5.7%, in the third quarter of 2024 as compared to the third quarter of 2023. These increases were primarily a result of gross margin dollar growth within supply chain as well as higher U.S. franchise royalties and fees, each as discussed above. These increases were partially offset by higher general and administrative expenses of $6.8 million, primarily driven by higher labor costs.
Net income decreased $0.8 million, or 0.5%, in the third quarter of 2024 as compared to the third quarter of 2023 due to higher provision for income taxes. The Company’s provision for income taxes increased $9.8 million in the third quarter of 2024 due to a higher effective tax rate and higher income before provision for income taxes. The effective tax rate increased to 20.4% in the third quarter of 2024 as compared to 15.9% in the third quarter of 2023, driven by lower foreign tax credits as well as a 0.9 percentage point unfavorable change in the impact of excess tax benefits from equity-based compensation, which is recorded as a reduction to the provision for income taxes.

 


 

Diluted EPS was $4.19 in the third quarter of 2024 as compared to $4.18 in the third quarter of 2023, representing a $0.01, or 0.2%, increase. While net income decreased in the third quarter of 2024 as compared to the third quarter of 2023, the increase in diluted EPS was driven by a lower weighted average diluted share count resulting from the Company’s share repurchases during the trailing four quarters.
Net cash provided by operating activities was $446.9 million in the three fiscal quarters of 2024 as compared to $422.1 million in the three fiscal quarters of 2023. The Company spent $70.8 million on capital expenditures in the three fiscal quarters of 2024 as compared to $59.3 million in the three fiscal quarters of 2023, resulting in free cash flow of $376.1 million in the three fiscal quarters of 2024 as compared to $362.9 million in the three fiscal quarters of 2023. The increase in free cash flow was a result of higher net income, excluding non-cash operating activities and receipts for advertising contributions outpacing payments for advertising activities. These increases were partially offset by the negative impact of changes in operating assets and liabilities and higher investments in capital expenditures.

Quarterly Dividend

Subsequent to the end of the third quarter of 2024, on October 8, 2024, the Company’s Board of Directors declared a $1.51 per share quarterly dividend on its outstanding common stock for shareholders of record as of December 13, 2024, to be paid on December 27, 2024.

Share Repurchases

During the third quarter and three fiscal quarters of 2024, the Company repurchased and retired 443,302 and 499,674 shares of common stock for a total of $190.0 million and $215.0 million, respectively. As of September 8, 2024, the Company had a total remaining authorized amount for share repurchases of $926.3 million.

2024 Guidance

The Company now expects the following given the challenging macroeconomic environment and its impact on current business trends across the globe1:

Approximately 6% annual global retail sales growth.
Approximately 8% annual income from operations growth.
Global net store growth of 800 to 850.

 

2025 Guidance

The Company expects annual global retail sales growth and annual income from operations growth to be generally in line with its 2024 expectations.

 

Long-Term Guidance (2026-2028)

The Company continues to expect the following1:

7%+ Annual global retail sales growth.
8%+ Annual income from operations growth.

1Annual global retail sales growth and annual income from operations growth each exclude the impact of foreign currency.

 


 

Comments on Regulation G

In addition to the GAAP financial measures set forth in this press release, the Company has included non-GAAP financial measures within the meaning of Regulation G, including free cash flow and income from operations, excluding foreign currency impact. The Company has also included metrics such as global retail sales, global retail sales growth (excluding foreign currency impact), same store sales growth, net store growth, food basket pricing change, impact of changes in foreign currency exchange rates on international franchise royalty revenues and the leverage ratio, which are commonly used statistical measures in the quick-service restaurant industry that are important to understanding Company performance.

 

The Company uses “Global retail sales,” a statistical measure, to refer to total worldwide retail sales at Company-owned and franchise stores. The Company believes global retail sales information is useful in analyzing revenues because franchisees pay royalties and advertising fees that are based on a percentage of franchise retail sales. The Company reviews comparable industry global retail sales information to assess business trends and to track the growth of the Domino’s Pizza brand and believes they are indicative of the financial health of the Company’s franchisee base. In addition, supply chain revenues are directly impacted by changes in franchise retail sales in the U.S. and Canada. As a result, sales by Domino’s franchisees have a direct effect on the Company’s profitability. Retail sales for franchise stores are reported to the Company by its franchisees and are not included in Company revenues. “Global retail sales growth” is calculated as the change of U.S. Dollar global retail sales against the comparable period of the prior year. “Global retail sales growth, excluding foreign currency impact” is calculated as the change of international local currency global retail sales against the comparable period of the prior year. The 2024 and 2023 global retail sales growth measures excluding the Russia market are calculated as the growth in retail sales excluding the retail sales from the Russia market from the 2023 and 2022 retail sales base. Changes in global retail sales growth, excluding foreign currency impact, are primarily driven by same store sales growth and net store growth.

 

The Company uses “Same store sales growth,” a statistical measure, which is calculated by including only retail sales from stores that also had sales in the comparable weeks of both periods. International same store sales growth is calculated similarly to U.S. same store sales growth. Changes in international same store sales are reported excluding foreign currency impacts, which reflect changes in international local currency sales. Same store sales growth for transferred stores is reflected in their current classification.

 

The Company uses “Net store growth,” a statistical measure, which is calculated by netting gross store openings with gross store closures during the period. Transfers between Company-owned stores and franchised stores are excluded from the calculation of net store growth.

 

The Company uses “Food basket pricing change,” a statistical measure, which is calculated as the percentage change of the food basket (including both food and cardboard products) purchased by an average U.S. store (based on average weekly unit sales) from U.S. supply chain centers against the comparable period of the prior year. The Company believes that the food basket pricing change is important to investors and other interested persons to understand the Company’s performance. As food basket prices fluctuate, revenues, cost of sales and gross margin percentages in the Company’s supply chain segment also fluctuate. Additionally, cost of sales, gross margins and gross margin percentages for the Company’s U.S. Company-owned stores also fluctuate.

 

The Company uses “Free cash flow,” which is calculated as net cash provided by operating activities, less capital expenditures, both as reported under GAAP. The most directly comparable financial measure calculated and presented in accordance with GAAP is net cash provided by operating activities. The Company believes that the free cash flow measure is important to investors and other interested persons, and that such persons benefit from having a measure which communicates how much cash flow is available for working capital needs or to be used for repurchasing debt, making acquisitions, repurchasing common stock or paying dividends.

 

The Company uses “Income from operations, excluding foreign currency impact,” which is calculated as income from operations as reported under GAAP, less the “impact of changes in foreign currency exchange rates on international franchise royalty revenues,” a statistical measure. The most directly comparable financial measure calculated and presented in accordance with GAAP is income from operations. The impact of changes in foreign currency exchange rates on international franchise royalty revenues is calculated as the difference in international franchise royalty revenues resulting from translating current period local currency results to U.S. dollars at current period exchange rates as compared to prior period exchange rates. The Company believes that the impact of changes in foreign currency exchange rates on international franchise royalty revenues is important to investors and other interested persons to understand the Company’s international royalty revenues given the significant variability in those revenues and that can be driven by changes in foreign currency exchanges rates. International franchise royalty revenues do not have a cost of sales component, so changes in these revenues have a direct impact on income from operations.

 

 


 

The Company uses the “Leverage ratio1,” which is calculated as the Company’s securitized debt related to its fixed-rate notes from the recapitalizations completed in 2021, 2019, 2018, 2017 and 2015 and borrowings under its variable funding notes, divided by Segment Income as defined by the Company under Accounting Standards Codification 280, Segment Reporting on a trailing four quarters basis. The Company has historically operated with a leverage ratio between four and six times. The Company reviews its leverage ratio on at least a quarterly basis and believes its leverage ratio is important to investors and other interested persons to understand the capital structure of the Company, and to assess the ability of the Company to meet its financial obligations.

 

The reconciliation of the leverage ratio for the third quarters of 2024 and 2023 is as follows:

 

 

 

September 8,
2024

 

 

September 10,
2023

 

2015 Ten-Year Notes

 

$

742,000

 

 

$

746,000

 

2017 Ten-Year Notes

 

 

940,000

 

 

 

945,000

 

2018 7.5-Year Notes

 

 

402,688

 

 

 

404,813

 

2018 9.25-Year Notes

 

 

379,000

 

 

 

381,000

 

2019 Ten-Year Notes

 

 

648,000

 

 

 

651,375

 

2021 7.5-Year Notes

 

 

826,625

 

 

 

830,875

 

2021 Ten-Year Notes

 

 

972,500

 

 

 

977,500

 

Total fixed-rate notes

 

$

4,910,813

 

 

$

4,936,563

 

 

 

 

 

 

 

 

Segment Income - third quarter of 2024 and 2023

 

$

229,278

 

 

$

217,287

 

Segment Income - second quarter of 2024 and 2023

 

 

227,400

 

 

 

223,618

 

Segment Income - first quarter of 2024 and 2023

 

 

241,843

 

 

 

203,615

 

Segment Income - fourth quarter of 2023 and 2022

 

 

294,600

 

 

 

260,328

 

Trailing four quarters Segment Income

 

$

993,121

 

 

$

904,848

 

Leverage ratio

 

 

4.9

x

 

 

5.5

x

 

(1)

 

The Company also calculates and reviews its senior leverage ratio and Holdco leverage ratio as defined in the indenture governing the Company’s securitized debt.

Russia Market

 

On August 21, 2023, the Company’s master franchisee that owned and operated Domino’s Pizza stores in Russia announced its intent to file for bankruptcy with respect to the stores in that market. Therefore, as of August 21, 2023, the Company has considered the stores in the Russia market to be closed and they are excluded from the Company’s ending store count as of the end of the third quarter of 2023. The Company has presented its statistical measure of global retail sales growth, excluding foreign currency impact, for the third quarter and three fiscal quarters of 2024 and 2023 excluding the impact of the retail sales from the Russia market. The Company believes the impact of the Russia market on its statistical measure of same store sales growth for the periods presented was immaterial, and it also believes the impact of the Russia market on its consolidated statements of income related to international franchise royalties and fee revenues and general and administrative expenses for the third quarter and three fiscal quarters of 2023 was immaterial.

 

Conference Call Information

The Company will file its Quarterly Report on Form 10-Q today. As previously announced, Domino’s Pizza, Inc. will hold a conference call today at 8:30 a.m. (Eastern) to review its third quarter 2024 financial results. The webcast is available at ir.dominos.com and will be archived for one year.

About Domino’s Pizza®

Founded in 1960, Domino’s Pizza is the largest pizza company in the world, with a significant business in both delivery and carryout pizza. It ranks among the world’s top public restaurant brands with a global enterprise of more than 21,000 stores in over 90 markets. Domino’s had global retail sales of over $18.9 billion for the trailing four quarters ended September 8, 2024. Its system is comprised of independent franchise owners who accounted for 99% of Domino’s stores as of the end of the third quarter of 2024. In the U.S., Domino’s generated more than 85% of U.S. retail sales in 2023 via digital channels and has developed several innovative ordering platforms including seven unique ways to order Domino’s.

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Please visit our Investor Relations website at ir.dominos.com to view news, announcements, earnings releases, investor presentations and conference webcasts.

 


 

SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995:

This press release contains various forward-looking statements about the Company within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Act”) that are based on current management expectations that involve substantial risks and uncertainties which could cause actual results to differ materially from the results expressed in, or implied by, these forward-looking statements. The following cautionary statements are being made pursuant to the provisions of the Act and with the intention of obtaining the benefits of the “safe harbor” provisions of the Act. You can identify forward-looking statements by the use of words such as “anticipates,” “believes,” “could,” “should,” “estimates,” “expects,” “intends,” “may,” “will,” “plans,” “predicts,” “projects,” “seeks,” “approximately,” “potential,” “outlook” and similar terms and phrases that concern our strategy, plans or intentions, including references to assumptions. These forward-looking statements address various matters including information concerning future results of operations and business strategy, our anticipated profitability, estimates in same store sales growth, store growth and the growth of our U.S. and international business in general, our ability to service our indebtedness, our future cash flows, our operating performance, trends in our business and other descriptions of future events reflect the Company’s expectations based upon currently available information and data. While we believe these expectations and projections are based on reasonable assumptions, such forward-looking statements are inherently subject to risks, uncertainties and assumptions. Important factors that could cause actual results to differ materially from our expectations are more fully described in our filings with the Securities and Exchange Commission, including under the section headed “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023. Actual results may differ materially from those expressed or implied in the forward-looking statements as a result of various factors, including but not limited to: our substantial indebtedness as a result of our recapitalization transactions and our ability to incur additional indebtedness or refinance or renegotiate key terms of that indebtedness in the future; the impact a downgrade in our credit rating may have on our business, financial condition and results of operations; our future financial performance and our ability to pay principal and interest on our indebtedness; the strength of our brand, including our ability to compete in the U.S. and internationally in our intensely competitive industry, including the food service and food delivery markets; our ability to successfully implement our growth strategy, including through our participation in the third-party order aggregation marketplace; labor shortages or changes in operating expenses resulting from increases in prices of food (particularly cheese), fuel and other commodity costs, labor, utilities, insurance, employee benefits and other operating costs or negative economic conditions; the effectiveness of our advertising, operations and promotional initiatives; shortages, interruptions or disruptions in the supply or delivery of fresh food products and store equipment; the impact of social media and other consumer-oriented technologies on our business, brand and reputation; the impact of new or improved technologies and alternative methods of delivery on consumer behavior; new product, digital ordering and concept developments by us, and other food-industry competitors; the additional risks our international operations subject us to; our ability to maintain good relationships with and attract new franchisees, and franchisees’ ability to successfully manage their operations without negatively impacting our royalty payments and fees or our brand’s reputation; our ability to successfully implement cost-saving strategies; our ability and that of our franchisees to successfully operate in the current and future credit environment; changes in the level of consumer spending given general economic conditions, including interest rates, energy prices and consumer confidence or negative economic conditions in general; our ability and that of our franchisees to open new restaurants and keep existing restaurants in operation and maintain demand for new stores; the impact that widespread illness, health epidemics or general health concerns, severe weather conditions and natural disasters may have on our business and the economies of the countries where we operate; changes in foreign currency exchange rates; changes in income tax rates; our ability to retain or replace our executive officers and other key members of management and our ability to adequately staff our stores and supply chain centers with qualified personnel; our ability to find and/or retain suitable real estate for our stores and supply chain centers; changes in government legislation and regulations, including changes in laws and regulations regarding information privacy, payment methods, advertising and consumer protection and social media; adverse legal judgments or settlements; food-borne illness or contamination of products or food tampering or other events that may impact our reputation; data breaches, power loss, technological failures, user error or other cyber risks threatening us or our franchisees; the impact that environmental, social and governance matters may have on our business and reputation; the effect of war, terrorism, catastrophic events, other geopolitical or reputational considerations or climate change; our ability to pay dividends and repurchase shares; changes in consumer tastes, spending and traffic patterns and demographic trends; changes in accounting policies; and adequacy of our insurance coverage. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this press release might not occur. All forward-looking statements speak only as of the date of this press release and should be evaluated with an understanding of their inherent uncertainty. Except as required under federal securities laws and the rules and regulations of the Securities and Exchange Commission, or other applicable law, we will not undertake, and specifically disclaim, any obligation to publicly update or revise any forward-looking statements to reflect events or circumstances arising after the date of this press release, whether as a result of new information, future events or otherwise. You are cautioned not to place undue reliance on the forward-looking statements included in this press release or that may be made elsewhere from time to time by, or on behalf of, us. All forward-looking statements attributable to us are expressly qualified by these cautionary statements.

TABLES TO FOLLOW

 

 

 

 

 


 

Domino’s Pizza, Inc. and Subsidiaries

Condensed Consolidated Statements of Income

(Unaudited)

 

 

 

Fiscal Quarter Ended

 

 

 

September 8,
2024

 

 

% of
Total
Revenues

 

 

September 10,
2023

 

 

% of
Total
Revenues

 

(In thousands, except share and per share data)

 

 

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Company-owned stores

 

$

89,173

 

 

 

 

 

$

86,277

 

 

 

 

U.S. franchise royalties and fees

 

 

144,074

 

 

 

 

 

 

138,322

 

 

 

 

Supply chain

 

 

651,314

 

 

 

 

 

 

618,086

 

 

 

 

International franchise royalties and fees

 

 

74,633

 

 

 

 

 

 

73,142

 

 

 

 

U.S. franchise advertising

 

 

120,925

 

 

 

 

 

 

111,534

 

 

 

 

Total revenues

 

 

1,080,119

 

 

 

100.0

%

 

 

1,027,361

 

 

 

100.0

%

Cost of sales:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Company-owned stores

 

 

74,205

 

 

 

 

 

 

72,614

 

 

 

 

Supply chain

 

 

582,167

 

 

 

 

 

 

556,578

 

 

 

 

Total cost of sales

 

 

656,372

 

 

 

60.8

%

 

 

629,192

 

 

 

61.2

%

Gross margin

 

 

423,747

 

 

 

39.2

%

 

 

398,169

 

 

 

38.8

%

General and administrative

 

 

103,991

 

 

 

9.6

%

 

 

97,203

 

 

 

9.5

%

U.S. franchise advertising

 

 

120,925

 

 

 

11.2

%

 

 

111,534

 

 

 

10.9

%

Income from operations

 

 

198,831

 

 

 

18.4

%

 

 

189,432

 

 

 

18.4

%

Other income

 

 

26,172

 

 

 

2.4

%

 

 

28,231

 

 

 

2.8

%

Interest expense, net

 

 

(40,387

)

 

 

(3.7

)%

 

 

(42,089

)

 

 

(4.1

)%

Income before provision for income taxes

 

 

184,616

 

 

 

17.1

%

 

 

175,574

 

 

 

17.1

%

Provision for income taxes

 

 

37,692

 

 

 

3.5

%

 

 

27,898

 

 

 

2.7

%

Net income

 

$

146,924

 

 

 

13.6

%

 

$

147,676

 

 

 

14.4

%

Earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

Common stock – diluted

 

$

4.19

 

 

 

 

 

$

4.18

 

 

 

 

Weighted average diluted shares

 

 

35,039,408

 

 

 

 

 

 

35,357,043

 

 

 

 

 

 


 

Domino’s Pizza, Inc. and Subsidiaries

Condensed Consolidated Statements of Income

(Unaudited)

 

 

 

Three Fiscal Quarters Ended

 

 

 

September 8,
2024

 

 

% of
Total
Revenues

 

 

September 10,
2023

 

 

% of
Total
Revenues

 

(In thousands, except share and per share data)

 

 

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Company-owned stores

 

$

274,086

 

 

 

 

 

$

258,882

 

 

 

 

U.S. franchise royalties and fees

 

 

442,168

 

 

 

 

 

 

410,454

 

 

 

 

Supply chain

 

 

1,969,772

 

 

 

 

 

 

1,858,023

 

 

 

 

International franchise royalties and fees

 

 

220,295

 

 

 

 

 

 

213,308

 

 

 

 

U.S. franchise advertising

 

 

356,181

 

 

 

 

 

 

335,719

 

 

 

 

Total revenues

 

 

3,262,502

 

 

 

100.0

%

 

 

3,076,386

 

 

 

100.0

%

Cost of sales:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Company-owned stores

 

 

226,722

 

 

 

 

 

 

214,609

 

 

 

 

Supply chain

 

 

1,753,132

 

 

 

 

 

 

1,673,405

 

 

 

 

Total cost of sales

 

 

1,979,854

 

 

 

60.7

%

 

 

1,888,014

 

 

 

61.4

%

Gross margin

 

 

1,282,648

 

 

 

39.3

%

 

 

1,188,372

 

 

 

38.6

%

General and administrative

 

 

320,962

 

 

 

9.8

%

 

 

290,186

 

 

 

9.4

%

U.S. franchise advertising

 

 

356,181

 

 

 

10.9

%

 

 

335,719

 

 

 

10.9

%

Refranchising loss

 

 

158

 

 

 

0.0

%

 

 

149

 

 

 

0.0

%

Income from operations

 

 

605,347

 

 

 

18.6

%

 

 

562,318

 

 

 

18.3

%

Other income

 

 

18,871

 

 

 

0.6

%

 

 

13,267

 

 

 

0.4

%

Interest expense, net

 

 

(122,996

)

 

 

(3.8

)%

 

 

(128,640

)

 

 

(4.2

)%

Income before provision for income taxes

 

 

501,222

 

 

 

15.4

%

 

 

446,945

 

 

 

14.5

%

Provision for income taxes

 

 

86,496

 

 

 

2.7

%

 

 

85,119

 

 

 

2.7

%

Net income

 

$

414,726

 

 

 

12.7

%

 

$

361,826

 

 

 

11.8

%

Earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

Common stock – diluted

 

$

11.80

 

 

 

 

 

$

10.19

 

 

 

 

Weighted average diluted shares

 

 

35,145,732

 

 

 

 

 

 

35,516,434

 

 

 

 

 

 


 

Domino’s Pizza, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(Unaudited)

 

 

 

September 8,
2024

 

 

December 31,
2023

 

(In thousands)

 

 

 

 

 

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

189,084

 

 

$

114,098

 

Restricted cash and cash equivalents

 

 

185,439

 

 

 

200,870

 

Accounts receivable, net

 

 

278,707

 

 

 

282,809

 

Inventories

 

 

69,168

 

 

 

82,964

 

Prepaid expenses and other

 

 

38,725

 

 

 

30,215

 

Advertising fund assets, restricted

 

 

111,134

 

 

 

106,335

 

Total current assets

 

 

872,257

 

 

 

817,291

 

Property, plant and equipment, net

 

 

293,407

 

 

 

304,365

 

Operating lease right-of-use assets

 

 

215,040

 

 

 

207,323

 

Investment in DPC Dash

 

 

162,424

 

 

 

143,553

 

Other assets

 

 

231,938

 

 

 

202,367

 

Total assets

 

$

1,775,066

 

 

$

1,674,899

 

Liabilities and stockholders’ deficit

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Current portion of long-term debt

 

$

4,946

 

 

$

56,366

 

Accounts payable

 

 

97,847

 

 

 

106,267

 

Operating lease liabilities

 

 

40,806

 

 

 

39,330

 

Advertising fund liabilities

 

 

109,219

 

 

 

104,246

 

Other accrued liabilities

 

 

257,690

 

 

 

241,141

 

Total current liabilities

 

 

510,508

 

 

 

547,350

 

Long-term liabilities:

 

 

 

 

 

 

Long-term debt, less current portion

 

 

4,970,687

 

 

 

4,934,062

 

Operating lease liabilities

 

 

186,981

 

 

 

179,548

 

Other accrued liabilities

 

 

83,528

 

 

 

84,306

 

Total long-term liabilities

 

 

5,241,196

 

 

 

5,197,916

 

Total stockholders’ deficit

 

 

(3,976,638

)

 

 

(4,070,367

)

Total liabilities and stockholders’ deficit

 

$

1,775,066

 

 

$

1,674,899

 

 

 

 

 

 

 

 

 

 

 

 


 

Domino’s Pizza, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Unaudited)

 

 

 

Three Fiscal Quarters Ended

 

 

 

September 8,
2024

 

 

September 10,
2023

 

(In thousands)

 

 

 

 

 

 

Cash flows from operating activities:

 

 

 

 

 

 

Net income

 

$

414,726

 

 

$

361,826

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

60,974

 

 

 

54,999

 

Refranchising loss

 

 

158

 

 

 

149

 

Loss on sale/disposal of assets

 

 

501

 

 

 

547

 

Amortization of debt issuance costs

 

 

3,685

 

 

 

3,858

 

Benefit for deferred income taxes

 

 

(7,524

)

 

 

(12,191

)

Non-cash equity-based compensation expense

 

 

31,541

 

 

 

26,507

 

Excess tax benefits from equity-based compensation

 

 

(21,609

)

 

 

(2,973

)

Provision for losses on accounts and notes receivable

 

 

250

 

 

 

1,342

 

Unrealized gain on investments

 

 

(18,871

)

 

 

(13,267

)

Changes in operating assets and liabilities

 

 

(18,968

)

 

 

7,682

 

Changes in advertising fund assets and liabilities, restricted

 

 

2,016

 

 

 

(6,349

)

Net cash provided by operating activities

 

 

446,879

 

 

 

422,130

 

Cash flows from investing activities:

 

 

 

 

 

 

Capital expenditures

 

 

(70,801

)

 

 

(59,271

)

Other

 

 

(1,094

)

 

 

(743

)

Net cash used in investing activities

 

 

(71,895

)

 

 

(60,014

)

Cash flows from financing activities:

 

 

 

 

 

 

Repayments of long-term debt and finance lease obligations

 

 

(15,947

)

 

 

(41,349

)

Proceeds from exercise of stock options

 

 

34,669

 

 

 

5,806

 

Purchases of common stock

 

 

(214,999

)

 

 

(210,847

)

Tax payments for restricted stock upon vesting

 

 

(10,706

)

 

 

(5,240

)

Payments of common stock dividends and equivalents

 

 

(106,015

)

 

 

(85,564

)

Net cash used in financing activities

 

 

(312,998

)

 

 

(337,194

)

Effect of exchange rate changes on cash

 

 

(589

)

 

 

(304

)

Change in cash and cash equivalents, restricted cash and cash equivalents

 

 

61,397

 

 

 

24,618

 

 

 

 

 

 

 

Cash and cash equivalents, beginning of period

 

 

114,098

 

 

 

60,356

 

Restricted cash and cash equivalents, beginning of period

 

 

200,870

 

 

 

191,289

 

Cash and cash equivalents included in advertising fund assets, restricted,
   beginning of period

 

 

88,165

 

 

 

143,559

 

Cash and cash equivalents, restricted cash and cash equivalents and
   cash and cash equivalents included in advertising fund assets, restricted,
   beginning of period

 

 

403,133

 

 

 

395,204

 

 

 

 

 

 

 

Cash and cash equivalents, end of period

 

 

189,084

 

 

 

80,879

 

Restricted cash and cash equivalents, end of period

 

 

185,439

 

 

 

202,307

 

Cash and cash equivalents included in advertising fund assets, restricted,
   end of period

 

 

90,007

 

 

 

136,636

 

Cash and cash equivalents, restricted cash and cash equivalents and cash and
   cash equivalents included in advertising fund assets, restricted,
   end of period

 

$

464,530

 

 

$

419,822

 

###

 


v3.24.3
Document and Entity Information
Oct. 10, 2024
Cover [Abstract]  
Entity Registrant Name DOMINOS PIZZA INC
Amendment Flag false
Entity Central Index Key 0001286681
Document Type 8-K
Document Period End Date Oct. 10, 2024
Entity Incorporation State Country Code DE
Entity File Number 001-32242
Entity Tax Identification Number 38-2511577
Entity Address, Address Line One 30 Frank Lloyd Wright Drive
Entity Address, City or Town Ann Arbor
Entity Address, State or Province MI
Entity Address, Postal Zip Code 48105
City Area Code (734)
Local Phone Number 930-3030
Written Communications false
Soliciting Material false
Pre Commencement Tender Offer false
Pre Commencement Issuer Tender Offer false
Security 12b Title Domino’s Pizza, Inc. Common Stock, $0.01 par value
Trading Symbol DPZ
Security Exchange Name NYSE
Entity Emerging Growth Company false

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