Monday, September 21, 2015

Domino's pizza revenue misses estimates for first time in 2 years

Domino's Pizza Inc (DPZ.N) reported quarterly revenue that missed analysts estimates for the first time in two years due to a strong dollar, and said Chief Financial Officer Michael Lawton will retire at the end of August.The company's shares were down 3 percent at $115.10 in midday trading on the New York Stock Exchange on Thursday.
Revenue for the second quarter ended June 14 rose 8.5 percent to $488.6 million, the slowest growth in six quarters, missing the average analyst estimate of $489.1 million.
However, the company reported a better-than-expected rise in quarterly same-store sales, helped by improved online and mobile ordering systems.
The company has been outperforming rivals such as Yum Brands Inc's (YUM.N) Pizza Hut and McDonald's Corp (MCD.N) in the United States due to the digital investments, which make it easier for customers to order pizzas using methods such as smart watches and digital wallets.
About half of Domino's U.S. sales came through digital channels last year.
U.S. same-store sales rose 12.8 percent in the quarter, higher than the 11.1 percent rise estimated by analysts polled by research firm Consensus Metrix.
Pizza Hut reported a disappointing 1 percent rise in U.S. same-store sales on Tuesday.
Domino's international same-store sales rose 6.7 percent, excluding the impact of changes in exchange rates. Analysts expected international sales to rise 6 percent.
The company got about 7.4 percent of its revenue from outside the United States in the quarter.
The second-largest U.S. pizza chain by store count said Lawton, who has been the CFO since August 2010, will be replaced by Treasurer Jeffrey Lawrence.
Net income rose to $45.9 million, or 81 cents per share, from $38.5 million, or 67 cents per share, a year earlier.
Analysts on average had expected a profit of 79 cents per share, according to Thomson Reuters I/B/E/S.
Stifel, Nicolaus & Co analysts on Thursday downgraded Domino's to "hold" from "buy", citing the recent appreciation in the stock's value.
Up to Wednesday's close, the company's shares had risen nearly 26 percent this year.

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