(Adds analyst comment, data and context)
By Lisa Baertlein
Oct 18 Domino's Pizza Inc on Tuesday
said share buybacks and a greater flow of customers helped
deliver a large quarterly profit jump, despite intense
competition that is pressuring its leading rivals.
Shares in the company jumped 7.6 percent to $163.62, a
record intraday high.
Sales at domestic franchise units open at least one year
were up 12.9 percent for the third quarter ended Sept. 11.
Analysts had expected a rise of 9.4 percent, according to
polling firm Consensus Metrix.
Foreign same-store sales rose by 6.6 percent.
The world's biggest pizza delivery chain held U.S. prices
largely steady during the quarter, which helped lure customers,
company executives said. Franchisees at some other chains,
including Dunkin' Donuts, saw business soften after they raised
prices to help offset higher labor costs.
Executives said Domino's online and mobile phone ordering
capabilities, which increase convenience, continue to bolster
sales. Its loyalty program, promotions and newly renovated
stores also helped during the latest quarter, they added.
Wall Street analysts are tempering growth expectations for
restaurant companies, including McDonald's Corp and
Dunkin' Brands Group Inc, due to intensifying
competition from upstart chains and meal-kit sellers as well as
grocery stores, where prices for beef and some other staples
have sharply fallen.
"Domino's posted the best Q2 domestic same-store sales
growth of the 25 largest restaurant chains in the U.S. - and now
looks poised to do so again in Q3, likely by a wide margin,"
Nomura restaurant analyst Mark Kalinowski said in a client note.
Its main rival, Yum Brands Inc's Pizza Hut, has been
struggling and reported a 2 percent decline in U.S. same-store
sales for the latest quarter. Small "mom and pop" pizza
restaurant operators, who have fewer financial resources to
weather higher costs and competition, also have been closing,
Domino's net income jumped almost 25 percent to $47.2
million, or 96 cents per share, topping the average analyst
estimate of 90 cents per share, according to Thomson Reuters
The Ann Arbor, Michigan-based company had 12 percent fewer
shares in the latest quarter, compared with the year-earlier
period, which helped lift per-share earnings.
Total revenue climbed 17 percent to $566.7 million, beating
analysts' average estimate of $542.6 million, helped by
increased sales of pizza ingredients and other supplies to
There were 5,273 domestic Domino's outlets at the end of the
quarter and 7,979 units abroad.
(Reporting by Lisa Baertlein in Los Angeles; Editing by Martina
D'Couto and W Simon)