There was a surge in demand from customer primarily in the United States as people took top the new menu items of the company, including cheeseburger and chicken taco pizzas, which helped Domino’s Pizza Inc to comfortable beat analysts’ estimates for revenue and profit for the second quarter.
The strong performance of the company pushed its stocks by 12 per cent to hit a record high of $526.29. This surge was also partly driven by the decision of the pizza chain to authorize a new $1 billion share buyback plan.
The lockdowns imposed during the pandemic to stop its spread had immensely benefited Domino’s and currently the company is trying to hold on to the momentum in its business in the past 18 months or so. One of the strategies employed by the company is to open up new stores to reduce delivery times and implementing new contactless takeaway options for customers.
In order to meet the surge in its expenses, Domino’s has also increased menu prices and delivery charges. The company has been hit by an increase in raw material costs and additional Covid-1i9 protocol expenses.
These moves have helped the company to clock a 3.5 per cent growth in same-store sales in the United States and the rise in this metric in the second quarter also market the 41st consecutive quarter of growth.
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.
The company also reported a very healthy 13.9 per cent growth in its same-store sales for its international operations which also comfortably beat estimates of analysts of 8.9 per cent growth for the second quarter. This growth was partially driven by re-imposition of fresh lockdowns in some countries because of resurgence of the pandemic which included the United Kingdom and India, which prompted customers to order more food online.
The company also reported a 12.2 per cent growth in total revenue at $1.03 billion for the second quarter ended June 20 which was also an estimate beating number as analysts had expected it to come in at $972.3 million, according to IBES data from Refinitiv.
Domino’s reported earnings of $3.12 per share on an adjusted basis, which was another metric which comfortably beat estimates of analysts of $2.87 per share.
(Adapted from Reuters.com)