Domino’s posts upbeat results as new menu items boost sales

FILE PHOTO: A Domino's Pizza restaurant is seen in Los Angeles
FILE PHOTO: A Domino's Pizza restaurant is seen in Los Angeles, California, U.S. July 18, 2018. REUTERS/Lucy Nicholson

July 22, 2021

By Praveen Paramasivam

(Reuters) -Domino’s Pizza Inc beat estimates for quarterly revenue and profit on Thursday, as its new menu items, including cheeseburger and chicken taco pizzas, whipped up demand from Americans ordering food from the comfort of their homes.

Shares of the company rose nearly 12% to hit a record high of $526.29, as the pizza chain also authorized a new $1 billion share buyback plan.

Domino’s, one of the biggest beneficiaries of the pandemic-induced lockdowns, is striving to keep up the momentum of 18 months by opening new stores to cut delivery times and introducing contactless takeaway options.

It has also raised menu prices and delivery fees to cope with a surge in expenses, triggered by higher raw material prices and expenses related to COVID-19.

Those efforts helped drive a 3.5% rise in its U.S. same-store sales, marking 41 consecutive quarters of increases. Analysts were expecting a 1.3% decline.

“You’ve often asked if our sales growth might be weaker in markets that had more fully reopened … the opposite trend emerged through the second quarter, where we saw higher levels of sales growth in the second quarter in the markets with fewer COVID-related restrictions,” Chief Executive Officer Ritch Allison said on a post-earnings call.

International same-store sales growth of 13.9% was also well above the 8.9% jump expected by analysts. That boost came from fresh lockdowns in countries, including the United Kingdom and India, where people relied on online ordering.

Total revenue rose 12.2% to $1.03 billion for the second quarter ended June 20, beating estimates of $972.3 million, according to IBES data from Refinitiv.

On an adjusted basis, Domino’s earned $3.12 per share, exceeding estimates of $2.87.

(Reporting by Praveen Paramasivam in Bengaluru; Editing by Anil D’Silva)