Ann Arbor / MG. (dp) Domino’s Pizza Inc., the largest pizza company in the world based on global retail sales, announced results for the third quarter of fiscal 2018, comprised of strong growth in same store sales, global store counts and earnings per share. Domestic same store sales grew 6.3 percent during the quarter versus the year-ago period, continuing the positive sales momentum in the Company’s domestic business. The international division also posted positive results, with same store sales growth of 3.3 percent during the quarter. The third quarter marked the 99th consecutive quarter of positive international same store sales growth and the 30th consecutive quarter of positive domestic same store sales growth. The Company also had third quarter global net store growth of 232 stores, comprised of 173 net new international stores and 59 net new domestic stores. Global retail sales increased 8.3 percent , or 10.4 percent without the negative impact of changes in foreign currency exchange rates. Diluted EPS was USD 1.95 for the third quarter, which was up 65.3 percent over the Company’s diluted EPS in the prior year quarter.
During the third quarter of 2018, the Company repurchased 397,490 shares of its common stock pursuant to its Board of Directors approved open market share repurchase program for approximately USD 109.1 million.
In addition to the USD 0.55 quarterly dividend paid on June 29, 2018, the Company’s Board of Directors also declared a USD 0.55 per share quarterly dividend for shareholders of record as of September 14, 2018, which was paid on September 28, 2018. Additionally, on October 11, 2018, the Board of Directors declared a USD 0.55 per share quarterly dividend for shareholders of record as of December 14, 2018, to be paid on December 28, 2018.
«I continue to be proud of our great franchisees and operators around the world. In particular, our U.S. business once again executed at extremely high levels in the third quarter. Our global business, driven by strong retail sales growth and franchisee economics that outperformed the industry, continued its strong momentum,» said Ritch Allison, Domino’s Chief Executive Officer.
Third Quarter 2018 Highlights
- Revenues increased USD 142.3 million, or 22.1 percent , in the third quarter of 2018. The Company adopted Accounting Standards Codification 606, Revenue from Contracts with Customers (ASC 606) in the first quarter of 2018. This resulted in the recognition of USD 82.5 million in domestic franchise advertising revenues during the third quarter of 2018 related to contributions from domestic franchisees to Domino’s National Advertising Fund Inc. (DNAF), the Company’s consolidated not-for-profit advertising fund. In 2017, under accounting standards in effect at that time, the Company had presented these contributions net with the related disbursements in its consolidated statement of income. The remaining increase in revenues was due primarily to higher supply chain volumes resulting from order and store count growth. Higher domestic franchise revenues, domestic Company-owned store and international franchise revenues resulting from higher retail sales also contributed to the increase.
- Net Income increased USD 27.7 million, or 49.2 percent , in the third quarter of 2018. This increase was driven by higher global royalty revenues and higher supply chain volumes. Additionally, the sale of 12 domestic Company-owned stores to a franchisee in the third quarter of 2018 resulted in a pre-tax gain on sale recorded in general and administrative expenses of USD 5.9 million. A lower tax rate resulting from regulations under the Tax Cuts and Jobs Act of 2017 and higher excess tax benefits from equity-based compensation as compared to the prior year also positively impacted net income in the third quarter through a reduction in the provision for income taxes.
- Diluted EPS was USD 1.95 for the third quarter versus USD 1.18 in the prior year quarter. This represents a USD 0.77 or 65.3 percent increase over the prior year quarter. Diluted EPS was USD 1.95 for the third quarter versus diluted EPS, as adjusted, of USD 1.27 in the prior year quarter, which represents a USD 0.68 or 53.5 percent increase over the prior year quarter. These increases were driven by higher net income, as well as lower diluted share count, primarily as a result of the share repurchases made during the trailing four quarters.
