Ann Arbor-based Domino’s Pizza Inc., the largest pizza company in the world based on global retail sales, today reported its global retail sales rose 4.4 percent in the first quarter, or 5.9 percent excluding foreign currency impact.
U.S. same store sales grew 1.6 percent during the quarter compared to last year. The international business posted same store sales growth of 1.5 percent during the quarter. The first quarter marked the 105th consecutive quarter of international same store sales growth, and the 36th consecutive quarter of U.S. same store sales growth.
During the quarter, the company opened 178 gross new stores and 69 net new stores, comprised of 30 net new U.S. stores and 39 net new international stores. The company’s net store growth includes the closure of its South Africa market, unrelated to the COVID-19 pandemic, comprising 71 stores in total.
First quarter diluted EPS was $3.07, up 39.5 percent over the prior year quarter. On April 21, the company’s board of directors declared a $0.78 per share quarterly dividend for shareholders of record as of June 15 to be paid on June 30.
“In a time of unprecedented change in our industry, I am pleased to report that Domino’s is in a very strong financial position, both at the brand and franchisee levels,” says Ritch Allison, CEO of Domino’s. “We can’t predict the full impact of COVID-19 on the broader economy, and we don’t know how consumer behavior and restaurant purchasing patterns may evolve coming out of this crisis.
“What I do know is that our franchisees and teams in the U.S. and across the globe will remain focused on safely serving our customers and our communities in this time of need. I have great confidence in our people and our ability to manage through this crisis, and I remain optimistic about the long-term potential of the Domino’s brand.”
In the first quarter of 2020, Domino’s net income was $121.6 million, compared to $92.7 million in 2019.
Revenues increased $37.1 million, or 4.4 percent, in the first quarter of 2020. This increase was primarily due to an increase in global store counts during the trailing four quarters as well as U.S. and international same store sales growth, resulting in higher supply chain and U.S. and international franchise revenues.
The increases in revenues were partially offset by lower U.S. company-owned store revenues resulting from the previously disclosed sale of 59 U.S. company-owned stores to certain of the company’s existing U.S. franchisees during the second quarter of 2019.
Net income increased $29 million, or 31.2 percent, in the first quarter of 2020. This increase was primarily driven by a lower effective tax rate as compared to the prior year quarter as a result of higher tax benefits from equity-based compensation. Higher royalty revenues from U.S. and international franchised stores and higher supply chain volumes also benefited net income. The increase in net income was partially offset by higher net interest expense as a result of a higher average debt balance.