Domino's Pizza Q4 EPS Up, Revenue Beats View; Backs Long-term Outlook; Stock Up

(RTTNews) - Domino's Pizza Inc. reported Monday slightly lower net earnings in its fourth quarter, while earnings per share and pre-tax profit were higher as strong demand boosted same store sales. Top line beat market estimates, and the company maintained long-term growth guidance for the years 2024 to 2028.

The pizza giant further announced higher dividend and up to $1 billion share buyback, which were approved on February 21.

In pre-market activity on the NYSE, Domino's Pizza shares were gaining more than 7 percent to trade at $464.

Russell Weiner, Domino's Chief Executive Officer, said, "Domino's foundation has never been stronger. Our positive U.S. transactions and same store sales growth in both our delivery and carryout channels in the fourth quarter underscore the strength and momentum in our business. These results give us confidence in our brand..."

Looking ahead for years 2024 to 2028, the company continues to expect 7 percent annual global retail sales growth and 8 percent annual income from operations growth. The company also sees annual global net store growth of 1,100+ stores.

On February 21, the company's Board of Directors approved a 25 percent increase to its per share quarterly dividend to $1.51 per share, to be paid on March 29 to shareholders of record as of March 15.

The authorized additional share repurchase program of up to $1.0 billion of stock is in addition to the $141.3 million that was previously remaining, for a total authorization of $1.14 billion for future share repurchases.

In its fourth quarter, net income edged down 0.6 percent to $157.29 million from last year's $158.30 million primarily due to an increase in the provision for income taxes.

Earnings per share, however, grew 1.1 percent to $4.48 from prior year's $4.43.

Analysts on average expected the company to report earnings of $4.38 per share, according to figures compiled by Thomson Reuters. Analysts' estimates typically exclude special items.

On a pre-tax basis, income grew to $205.50 million from prior year's $189.79 million.

Total revenues edged up 0.8 percent to $1.40 billion from $1.39 billion in the prior year. Analysts expected revenues of $1.42 billion for the quarter.

Higher global franchise royalties and fees, resulting from global retail sales growth, and higher supply chain revenues, were partially offset by a decrease in U.S. franchise advertising revenues.

In the quarter, the increase in supply chain revenues was mainly attributable to higher order volumes, despite a 2 percent decline in the market basket pricing to stores.

Meanwhile, the decrease in U.S. franchise advertising revenues was primarily due to an increase in advertising incentives related to certain brand promotions.

Total global retail sales grew to $5.73 billion from last year's $5.46 billion. Global retail sales growth, excluding foreign currency impact, was 4.9 percent for the fourth quarter.

U.S. same store sales growth was 2.8 percent on top of a 0.9 percent increase last year. Same store sales of U.S. Company-owned stores grew 5.9 percent and U.S. franchise stores increased 2.6 percent.

International same store sales growth was 0.1 percent.

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