Global retail sales growth (excluding foreign
currency impact) of 7.2%
U.S. same store sales growth of 4.8%
International same store sales growth (excluding
foreign currency impact) of 2.1%
Global net store growth of 175
Income from operations increased 0.4%; excluding
the negative impact of foreign currency exchange rates on
international franchise royalty revenues of $2.7 million, income from operations increased
1.7%
ANN
ARBOR, Mich., July 18,
2024 /PRNewswire/ -- Domino's Pizza, Inc.
(NYSE: DPZ), the largest pizza company in the world, announced
results for the second quarter of 2024.
"Our year-to-date performance demonstrates that our Hungry for
MORE strategy is off to a great start, having an immediate impact
on sales and profits," said Russell
Weiner, Domino's Chief Executive Officer. "For the second
straight quarter we drove U.S. comp performance in the healthiest
way possible, through profitable order count growth. We had
positive order counts in our delivery and carryout businesses, and
across all income cohorts. Our strategy is resonating with
customers and our system, which gives me great confidence that we
can drive significant long-term value creation for our
shareholders."
Second 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.
|
|
Second
Quarter
|
|
|
Two Fiscal
Quarters
|
|
|
|
2024
|
|
|
2023
|
|
|
2024
|
|
|
2023
|
|
Global retail
sales: (in millions of U.S. dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. stores
|
|
$
|
2,222.1
|
|
|
$
|
2,081.2
|
|
|
$
|
4,434.0
|
|
|
$
|
4,132.2
|
|
International
stores
|
|
|
2,206.1
|
|
|
|
2,128.7
|
|
|
|
4,358.2
|
|
|
|
4,191.3
|
|
Total
|
|
$
|
4,428.2
|
|
|
$
|
4,209.9
|
|
|
$
|
8,792.2
|
|
|
$
|
8,323.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second
Quarter
|
|
Two Fiscal
Quarters
|
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
Global retail sales
growth: (versus prior year period,
excluding foreign currency impact)
|
|
|
|
|
|
|
|
|
U.S. stores
|
|
+ 6.8 %
|
|
+ 1.7 %
|
|
+ 7.3 %
|
|
+ 3.4 %
|
International stores
(1)
|
|
+ 7.7 %
|
|
+
10.1 %
|
|
+ 7.2 %
|
|
+ 8.3 %
|
Total
(2)
|
|
+ 7.2 %
|
|
+ 5.8 %
|
|
+ 7.3 %
|
|
+ 5.8 %
|
|
|
|
|
|
|
|
|
|
Same store sales
growth: (versus prior year period)
|
|
|
|
|
|
|
|
|
U.S. Company-owned
stores
|
|
+ 4.5 %
|
|
+ 5.5 %
|
|
+ 6.5 %
|
|
+ 6.4 %
|
U.S. franchise
stores
|
|
+ 4.8 %
|
|
(0.1) %
|
|
+ 5.2 %
|
|
+ 1.6 %
|
U.S. stores
|
|
+ 4.8 %
|
|
+ 0.1 %
|
|
+ 5.2 %
|
|
+ 1.8 %
|
International stores
(excluding foreign currency impact)
|
|
+ 2.1 %
|
|
+ 3.6 %
|
|
+ 1.5 %
|
|
+ 2.3 %
|
|
|
|
(1)
|
|
2024 second quarter and
two 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
7.2% and 6.7% for the second quarter and two fiscal quarters of
2024, respectively.
|
(2)
|
|
2024 second quarter and
two 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 7.0%
for each of the second quarter and two fiscal quarters of
2024.
|
|
|
U.S. Company-
owned Stores
|
|
|
U.S. Franchise
Stores
|
|
|
Total
U.S. Stores
|
|
|
International
Stores
|
|
|
Total
|
|
Second quarter of
2024 store counts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Store count at
March 24, 2024
|
|
|
289
|
|
|
|
6,585
|
|
|
|
6,874
|
|
|
|
13,881
|
|
|
|
20,755
|
|
Openings
|
|
|
1
|
|
|
|
32
|
|
|
|
33
|
|
|
|
195
|
|
|
|
228
|
|
Closings
|
|
|
—
|
|
|
|
(1)
|
|
|
|
(1)
|
|
|
|
(52)
|
|
|
|
(53)
|
|
Transfers
|
|
|
(1)
|
|
|
|
1
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Store count at June
16, 2024
|
|
|
289
|
|
|
|
6,617
|
|
|
|
6,906
|
|
|
|
14,024
|
|
|
|
20,930
|
|
Second quarter 2024
net store growth
|
|
|
1
|
|
|
|
31
|
|
|
|
32
|
|
|
|
143
|
|
|
|
175
|
|
Trailing four quarters
net store growth
|
|
|
5
|
|
|
|
166
|
|
|
|
171
|
|
|
|
554
|
|
|
|
725
|
|
Trailing four quarters
net store growth, excluding Russia (1)
|
|
|
5
|
|
|
|
166
|
|
|
|
171
|
|
|
|
697
|
|
|
|
868
|
|
|
|
|
(1)
|
|
As previously
announced, the remaining 143 net stores in Russia were reflected as
closed in the third quarter of 2023 and are reflected as closures
in the trailing four quarters ended June 16, 2024. Refer to
Comments on Regulation G and Russia Market discussion
below for additional details.
|
|
|
Second
Quarter
|
|
Two Fiscal
Quarters
|
(In millions, except
percentages, percentage points, per share data and leverage
ratio)
|
|
2024
|
|
2023
|
|
Increase/
(Decrease)
|
|
2024
|
|
2023
|
|
Increase/
(Decrease)
|
Total
revenues
|
|
$1,097.7
|
|
$1,024.6
|
|
+ 7.1 %
|
|
$2,182.4
|
|
$2,049.0
|
|
+ 6.5 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Company-owned
store gross margin
|
|
17.6 %
|
|
18.6 %
|
|
(1.0) pp
|
|
17.5 %
|
|
17.7 %
|
|
(0.2) pp
|
Supply chain gross
margin
|
|
11.3 %
|
|
10.9 %
|
|
+ 0.4 pp
|
|
11.2 %
|
|
9.9 %
|
|
+ 1.3 pp
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
operations
|
|
$196.1
|
|
$195.4
|
|
+ 0.4 %
|
|
$406.5
|
|
$372.9
|
|
+ 9.0 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$142.0
|
|
$109.4
|
|
+
29.8 %
|
|
$267.8
|
|
$214.2
|
|
+
25.1 %
|
Diluted earnings per
share
|
|
$4.03
|
|
$3.08
|
|
+
30.8 %
|
|
$7.61
|
|
$6.02
|
|
+
26.4 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Leverage
ratio
|
|
|
|
|
|
|
|
5.0x
|
|
5.6x
|
|
(0.6)x
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
|
|
|
|
|
|
|
$274.2
|
|
$242.3
|
|
+
13.2 %
|
Capital
expenditures
|
|
|
|
|
|
|
|
(43.7)
|
|
(38.0)
|
|
+
15.0 %
|
Free cash
flow
|
|
|
|
|
|
|
|
$230.5
|
|
$204.3
|
|
+
12.8 %
|
- Revenues increased $73.1
million, or 7.1%, in the second quarter of 2024 as compared
to the second 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 0.7% during
the second quarter of 2024 as compared to the second quarter of
2023. U.S. franchise advertising revenues increased as a result of
higher same store sales, 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, 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 decreased 1.0
percentage point in the second quarter of 2024 as compared to the
second quarter of 2023. This decrease was primarily driven by
higher insurance costs and increased labor costs as a result of
higher wage rates. This decrease was partially offset by sales
leverage due to higher customer transaction counts.
- Supply chain gross margin increased 0.4 percentage
points in the second quarter of 2024 as compared to the second
quarter of 2023, primarily due to procurement productivity,
partially offset by investments in supply chain labor.
- Income from operations increased $0.7 million, or 0.4%, in the second quarter of
2024 as compared to the second quarter of 2023. Excluding the
negative impact of foreign currency exchange rates on international
franchise royalty revenues of $2.7
million, income from operations increased $3.4 million, or 1.7%, in the second quarter of
2024 as compared to the second quarter of 2023. These increases
were primarily a result of higher U.S. franchise royalties and
fees, as well as gross margin dollar growth within supply chain,
each as discussed above. These increases were partially offset by
higher general and administrative expenses of $18.2 million, primarily driven by higher labor
costs as well as expenses for the Company's Worldwide Rally that
takes place every two years.
- Net income increased $32.6
million, or 29.8%, in the second quarter of 2024 as compared
to the second quarter of 2023, primarily due to a change of
$26.4 million in the pre-tax
unrealized gains and losses associated with the remeasurement of
the Company's investment in DPC Dash Ltd ("DPC Dash").
Additionally, the Company's provision for income taxes decreased
$3.6 million in the second quarter of
2024 due to a lower effective tax rate, partially offset by higher
income before provision for income taxes. The effective tax rate
decreased to 15.0% in the second quarter of 2024 as compared to
20.8% in the second quarter of 2023, driven by a 7.0 percentage
point 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 $4.03
in the second quarter of 2024 as compared to $3.08 in the second quarter of 2023, representing
a $0.95, or 30.8%, increase. The
increase in diluted EPS was driven by higher net income as
discussed above.
- Net cash provided by operating activities was
$274.2 million in the two fiscal
quarters of 2024 as compared to $242.3
million in the two fiscal quarters of 2023. The Company
spent $43.7 million on capital
expenditures in the two fiscal quarters of 2024, as compared
to $38.0 million in the two fiscal
quarters of 2023, resulting in free cash flow of
$230.5 million in the two fiscal
quarters of 2024 as compared to $204.3
million in the two fiscal quarters of 2023. The
increase in free cash flow was a result of higher net income,
excluding non-cash operating activities, partially offset by the
negative impact of changes in operating assets and liabilities,
higher investments in capital expenditures and payments for
advertising activities outpacing receipts from advertising
contributions.
Quarterly Dividend
Subsequent to the end of the second quarter of 2024, on
July 16, 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 September 13, 2024,
to be paid on September 30, 2024.
Share Repurchases
During the two fiscal quarters of 2024, the Company repurchased
and retired 56,372 shares of common stock for a total of
$25.0 million. As of June 16,
2024, the Company had a total remaining authorized amount for share
repurchases of $1.12 billion.
Long-Term Guidance (2024 - 2028)
The Company continues to expect the following guidance metrics.
Annual global retail sales growth and annual income from operations
growth exclude the impact of foreign currency.
- 7%+ Annual global retail sales growth; and
- 8%+ Annual income from operations growth.
The Company now expects the following on annual global net store
growth:
- Global net store growth of 825 to 925 in 2024.
- U.S.: The Company continues to expect 175+ net stores annually
for 2024 to 2028.
- International: The Company expects it will fall 175 to 275
stores below its 2024 goal of 925+ net stores in international
primarily as a result of challenges in both openings and closures
being faced by Domino's Pizza Enterprises ("DPE"), one of its
master franchisees. The Company is partnering closely with DPE as
they work through this process and will provide further updates
once it has more visibility into the effect on its annual global
net store growth numbers.
- The Company is temporarily suspending its guidance metric of
1,100+ global net stores until the full effect of DPE's store opens
and closures on international net store growth are known.
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 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 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 second quarters
of 2024 and 2023 is as follows:
|
|
June 16,
2024
|
|
|
June 18,
2023
|
|
2015 Ten-Year
Notes
|
|
$
|
742,000
|
|
|
$
|
748,000
|
|
2017 Ten-Year
Notes
|
|
|
940,000
|
|
|
|
947,500
|
|
2018 7.5-Year
Notes
|
|
|
402,688
|
|
|
|
405,875
|
|
2018 9.25-Year
Notes
|
|
|
379,000
|
|
|
|
382,000
|
|
2019 Ten-Year
Notes
|
|
|
648,000
|
|
|
|
653,063
|
|
2021 7.5-Year
Notes
|
|
|
826,625
|
|
|
|
833,000
|
|
2021 Ten-Year
Notes
|
|
|
972,500
|
|
|
|
980,000
|
|
Total fixed-rate
notes
|
|
$
|
4,910,813
|
|
|
$
|
4,949,438
|
|
|
|
|
|
|
|
|
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
|
|
Segment Income - third
quarter of 2023 and 2022
|
|
|
217,287
|
|
|
|
201,264
|
|
Trailing four quarters
Segment Income
|
|
$
|
981,130
|
|
|
$
|
888,825
|
|
Leverage
ratio
|
|
|
5.0
|
x
|
|
|
5.6
|
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 disclosed its statistical
measure of net store growth for the trailing four quarters
including and excluding the impact of the closure of the
Russia market. Additionally, the
Company has presented its statistical measure of global retail
sales growth, excluding foreign currency impact, for the second
quarter and two fiscal quarters of 2024 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
global retail sales growth, excluding foreign currency impact, for
the second quarter and two fiscal quarters of 2023 was immaterial
and prior amounts have not been adjusted to conform to the current
year presentation. 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 second
quarter and two 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 second 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 20,900 stores in over
90 markets. Domino's had global retail sales of over $18.7 billion for the trailing four quarters
ended June 16, 2024. Its system is comprised of independent
franchise owners who accounted for 99% of Domino's stores as of the
end of the second 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.
Order – dominos.com
Company Info – biz.dominos.com
Media Assets – media.dominos.com
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 increased
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
|
|
|
|
June 16,
2024
|
|
|
% of
Total
Revenues
|
|
|
June 18,
2023
|
|
|
% of
Total
Revenues
|
|
(In thousands, except
share and per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Company-owned
stores
|
|
$
|
92,264
|
|
|
|
|
|
$
|
87,694
|
|
|
|
|
U.S. franchise
royalties and fees
|
|
|
147,576
|
|
|
|
|
|
|
139,268
|
|
|
|
|
Supply
chain
|
|
|
659,244
|
|
|
|
|
|
|
615,711
|
|
|
|
|
International
franchise royalties and fees
|
|
|
73,696
|
|
|
|
|
|
|
70,495
|
|
|
|
|
U.S. franchise
advertising
|
|
|
124,956
|
|
|
|
|
|
|
111,459
|
|
|
|
|
Total
revenues
|
|
|
1,097,736
|
|
|
|
100.0
|
%
|
|
|
1,024,627
|
|
|
|
100.0
|
%
|
Cost of
sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Company-owned
stores
|
|
|
76,059
|
|
|
|
|
|
|
71,423
|
|
|
|
|
Supply
chain
|
|
|
584,646
|
|
|
|
|
|
|
548,548
|
|
|
|
|
Total cost of
sales
|
|
|
660,705
|
|
|
|
60.2
|
%
|
|
|
619,971
|
|
|
|
60.5
|
%
|
Gross margin
|
|
|
437,031
|
|
|
|
39.8
|
%
|
|
|
404,656
|
|
|
|
39.5
|
%
|
General and
administrative
|
|
|
115,947
|
|
|
|
10.5
|
%
|
|
|
97,794
|
|
|
|
9.5
|
%
|
U.S. franchise
advertising
|
|
|
124,956
|
|
|
|
11.4
|
%
|
|
|
111,459
|
|
|
|
10.9
|
%
|
Refranchising
loss
|
|
|
25
|
|
|
|
0.0
|
%
|
|
|
—
|
|
|
|
—
|
|
Income from
operations
|
|
|
196,103
|
|
|
|
17.9
|
%
|
|
|
195,403
|
|
|
|
19.1
|
%
|
Other income
(expense)
|
|
|
11,398
|
|
|
|
1.0
|
%
|
|
|
(14,964)
|
|
|
|
(1.5)
|
%
|
Interest expense,
net
|
|
|
(40,502)
|
|
|
|
(3.7)
|
%
|
|
|
(42,395)
|
|
|
|
(4.1)
|
%
|
Income before provision
for income taxes
|
|
|
166,999
|
|
|
|
15.2
|
%
|
|
|
138,044
|
|
|
|
13.5
|
%
|
Provision for income
taxes
|
|
|
25,021
|
|
|
|
2.3
|
%
|
|
|
28,664
|
|
|
|
2.8
|
%
|
Net income
|
|
$
|
141,978
|
|
|
|
12.9
|
%
|
|
$
|
109,380
|
|
|
|
10.7
|
%
|
Earnings per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock –
diluted
|
|
$
|
4.03
|
|
|
|
|
|
$
|
3.08
|
|
|
|
|
Weighted average
diluted shares
|
|
|
35,224,080
|
|
|
|
|
|
|
35,492,423
|
|
|
|
|
Domino's Pizza, Inc.
and Subsidiaries
Condensed
Consolidated Statements of Income
(Unaudited)
|
|
|
|
|
|
Two Fiscal Quarters
Ended
|
|
|
|
June 16,
2024
|
|
|
% of
Total
Revenues
|
|
|
June 18,
2023
|
|
|
% of
Total
Revenues
|
|
(In thousands, except
share and per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Company-owned
stores
|
|
$
|
184,913
|
|
|
|
|
|
$
|
172,605
|
|
|
|
|
U.S. franchise
royalties and fees
|
|
|
298,094
|
|
|
|
|
|
|
272,132
|
|
|
|
|
Supply
chain
|
|
|
1,318,458
|
|
|
|
|
|
|
1,239,937
|
|
|
|
|
International
franchise royalties and fees
|
|
|
145,662
|
|
|
|
|
|
|
140,166
|
|
|
|
|
U.S. franchise
advertising
|
|
|
235,256
|
|
|
|
|
|
|
224,185
|
|
|
|
|
Total
revenues
|
|
|
2,182,383
|
|
|
|
100.0
|
%
|
|
|
2,049,025
|
|
|
|
100.0
|
%
|
Cost of
sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Company-owned
stores
|
|
|
152,517
|
|
|
|
|
|
|
141,995
|
|
|
|
|
Supply
chain
|
|
|
1,170,965
|
|
|
|
|
|
|
1,116,827
|
|
|
|
|
Total cost of
sales
|
|
|
1,323,482
|
|
|
|
60.6
|
%
|
|
|
1,258,822
|
|
|
|
61.4
|
%
|
Gross margin
|
|
|
858,901
|
|
|
|
39.4
|
%
|
|
|
790,203
|
|
|
|
38.6
|
%
|
General and
administrative
|
|
|
216,971
|
|
|
|
10.0
|
%
|
|
|
192,983
|
|
|
|
9.4
|
%
|
U.S. franchise
advertising
|
|
|
235,256
|
|
|
|
10.8
|
%
|
|
|
224,185
|
|
|
|
11.0
|
%
|
Refranchising
loss
|
|
|
158
|
|
|
|
0.0
|
%
|
|
|
149
|
|
|
|
0.0
|
%
|
Income from
operations
|
|
|
406,516
|
|
|
|
18.6
|
%
|
|
|
372,886
|
|
|
|
18.2
|
%
|
Other
expense
|
|
|
(7,301)
|
|
|
|
(0.3)
|
%
|
|
|
(14,964)
|
|
|
|
(0.7)
|
%
|
Interest expense,
net
|
|
|
(82,609)
|
|
|
|
(3.8)
|
%
|
|
|
(86,551)
|
|
|
|
(4.2)
|
%
|
Income before provision
for income taxes
|
|
|
316,606
|
|
|
|
14.5
|
%
|
|
|
271,371
|
|
|
|
13.3
|
%
|
Provision for income
taxes
|
|
|
48,804
|
|
|
|
2.2
|
%
|
|
|
57,221
|
|
|
|
2.8
|
%
|
Net income
|
|
$
|
267,802
|
|
|
|
12.3
|
%
|
|
$
|
214,150
|
|
|
|
10.5
|
%
|
Earnings per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock –
diluted
|
|
$
|
7.61
|
|
|
|
|
|
$
|
6.02
|
|
|
|
|
Weighted average
diluted shares
|
|
|
35,199,277
|
|
|
|
|
|
|
35,601,335
|
|
|
|
|
Domino's Pizza, Inc.
and Subsidiaries
Condensed
Consolidated Balance Sheets
(Unaudited)
|
|
|
|
|
|
June 16,
2024
|
|
|
December 31,
2023
|
|
(In
thousands)
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
283,699
|
|
|
$
|
114,098
|
|
Restricted cash and
cash equivalents
|
|
|
197,019
|
|
|
|
200,870
|
|
Accounts receivable,
net
|
|
|
285,961
|
|
|
|
282,809
|
|
Inventories
|
|
|
69,279
|
|
|
|
82,964
|
|
Prepaid expenses and
other
|
|
|
50,291
|
|
|
|
30,215
|
|
Advertising fund
assets, restricted
|
|
|
99,849
|
|
|
|
106,335
|
|
Total current
assets
|
|
|
986,098
|
|
|
|
817,291
|
|
Property, plant and
equipment, net
|
|
|
296,403
|
|
|
|
304,365
|
|
Operating lease
right-of-use assets
|
|
|
210,919
|
|
|
|
207,323
|
|
Investment in DPC
Dash
|
|
|
136,252
|
|
|
|
143,553
|
|
Other assets
|
|
|
226,334
|
|
|
|
202,367
|
|
Total assets
|
|
$
|
1,856,006
|
|
|
$
|
1,674,899
|
|
Liabilities and
stockholders' deficit
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
Current portion of
long-term debt
|
|
$
|
4,938
|
|
|
$
|
56,366
|
|
Accounts
payable
|
|
|
110,556
|
|
|
|
106,267
|
|
Operating lease
liabilities
|
|
|
39,955
|
|
|
|
39,330
|
|
Advertising fund
liabilities
|
|
|
97,845
|
|
|
|
104,246
|
|
Other accrued
liabilities
|
|
|
254,534
|
|
|
|
241,141
|
|
Total current
liabilities
|
|
|
507,828
|
|
|
|
547,350
|
|
Long-term
liabilities:
|
|
|
|
|
|
|
Long-term debt, less
current portion
|
|
|
4,973,676
|
|
|
|
4,934,062
|
|
Operating lease
liabilities
|
|
|
183,429
|
|
|
|
179,548
|
|
Other accrued
liabilities
|
|
|
82,198
|
|
|
|
84,306
|
|
Total long-term
liabilities
|
|
|
5,239,303
|
|
|
|
5,197,916
|
|
Total stockholders'
deficit
|
|
|
(3,891,125)
|
|
|
|
(4,070,367)
|
|
Total liabilities and
stockholders' deficit
|
|
$
|
1,856,006
|
|
|
$
|
1,674,899
|
|
Domino's Pizza, Inc.
and Subsidiaries
Condensed
Consolidated Statements of Cash Flows
(Unaudited)
|
|
|
|
|
|
Two Fiscal Quarters
Ended
|
|
|
|
June 16,
2024
|
|
|
June 18,
2023
|
|
(In
thousands)
|
|
|
|
|
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
Net income
|
|
$
|
267,802
|
|
|
$
|
214,150
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
40,218
|
|
|
|
36,731
|
|
Refranchising
loss
|
|
|
158
|
|
|
|
149
|
|
Loss on sale/disposal
of assets
|
|
|
327
|
|
|
|
402
|
|
Amortization of debt
issuance costs
|
|
|
2,475
|
|
|
|
2,578
|
|
Benefit for deferred
income taxes
|
|
|
(6,246)
|
|
|
|
(7,596)
|
|
Non-cash equity-based
compensation expense
|
|
|
22,024
|
|
|
|
17,065
|
|
Excess tax benefits
from equity-based compensation
|
|
|
(20,238)
|
|
|
|
(133)
|
|
Provision for losses
on accounts and notes receivable
|
|
|
111
|
|
|
|
1,166
|
|
Unrealized loss on
investments
|
|
|
7,301
|
|
|
|
14,964
|
|
Changes in operating
assets and liabilities
|
|
|
(31,660)
|
|
|
|
(33,794)
|
|
Changes in advertising
fund assets and liabilities, restricted
|
|
|
(8,122)
|
|
|
|
(3,391)
|
|
Net cash provided by
operating activities
|
|
|
274,150
|
|
|
|
242,291
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
Capital
expenditures
|
|
|
(43,683)
|
|
|
|
(37,980)
|
|
Other
|
|
|
(1,277)
|
|
|
|
(1,211)
|
|
Net cash used in
investing activities
|
|
|
(44,960)
|
|
|
|
(39,191)
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
Repayments of
long-term debt and finance lease obligations
|
|
|
(14,764)
|
|
|
|
(27,186)
|
|
Proceeds from exercise
of stock options
|
|
|
31,467
|
|
|
|
1,051
|
|
Purchases of common
stock
|
|
|
(25,000)
|
|
|
|
(120,847)
|
|
Tax payments for
restricted stock upon vesting
|
|
|
(9,260)
|
|
|
|
(3,068)
|
|
Payments of common
stock dividends and equivalents
|
|
|
(53,100)
|
|
|
|
(42,930)
|
|
Net cash used in
financing activities
|
|
|
(70,657)
|
|
|
|
(192,980)
|
|
Effect of exchange rate
changes on cash
|
|
|
(990)
|
|
|
|
494
|
|
Change in cash and cash
equivalents, restricted cash and cash equivalents
|
|
|
157,543
|
|
|
|
10,614
|
|
|
|
|
|
|
|
|
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
|
|
|
283,699
|
|
|
|
77,020
|
|
Restricted cash and
cash equivalents, end of period
|
|
|
197,019
|
|
|
|
189,694
|
|
Cash and cash
equivalents included in advertising fund assets, restricted,
end of period
|
|
|
79,958
|
|
|
|
139,104
|
|
Cash and cash
equivalents, restricted cash and cash equivalents and cash and
cash equivalents included in advertising fund assets,
restricted,
end of period
|
|
$
|
560,676
|
|
|
$
|
405,818
|
|
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SOURCE Domino's Pizza, Inc.