Ann Arbor / MG. (dp) Domino’s Pizza Inc., the largest pizza company in the world, announced results for the fourth quarter and fiscal 2022. Global retail sales, excluding the negative impact of foreign currency, grew 5.2 percent in the fourth quarter of 2022 and grew 3.9 percent in fiscal 2022. Without adjusting for the impact of foreign currency, global retail sales declined 1.1 percent in the fourth quarter of 2022 and declined 1.3 percent in fiscal 2022.
U.S. same store sales grew 0.9 percent during the fourth quarter of 2022 and declined 0.8 percent in fiscal 2022. International same store sales (excluding foreign currency impact) grew 2.6 percent during the fourth quarter of 2022 and grew 0.1 percent in fiscal 2022. The Company had fourth quarter global net store growth of 361 stores, comprised of 43 net U.S. store openings and 318 net international store openings. The Company had 456 gross store openings and 95 closures during the fourth quarter of 2022. In fiscal 2022, the Company had global net store growth of 1,032 stores, comprised of 126 net U.S. store openings and 906 net international store openings. The Company had 1,276 gross store openings and 244 closures during fiscal 2022.
Diluted EPS for the fourth quarter of 2022 was USD 4.43, an increase of 4.2 percent from diluted EPS of USD 4.25 in the fourth quarter of 2021. Diluted EPS for fiscal 2022 was USD 12.53, a decrease of 7.5 percent from diluted EPS of USD 13.54 in fiscal 2021. Diluted EPS for fiscal 2021 was negatively impacted by expenses associated with the Company’s April 2021 recapitalization transaction. Diluted EPS for fiscal 2022 declined 7.9 percent from diluted EPS, as adjusted of USD 13.60 in fiscal 2021. Refer to the Financial Results Comparability and the Comments on Regulation G sections below for additional information.
During the fourth quarter of 2022, the Company refranchised 114 U.S. Company-owned stores in Arizona and Utah for USD 41.1 million. In connection with the 2022 Store Sale, the Company recorded a USD 21.2 million pre-tax gain on the sale of the related assets and liabilities, which included a USD 4.3 million reduction in goodwill.
Subsequent to the end of the fourth quarter of 2022, on February 21, 2023, the Company’s Board of Directors approved a 10 percent increase to the quarterly dividend and a USD 1.21 per share quarterly dividend was declared on its outstanding common stock for shareholders of record as of March 15, 2023 to be paid on March 30, 2023.
«We pride ourselves on being a work-in-progress brand and there is no better way to describe this period in our history,» said Russell Weiner, Domino’s Chief Executive Officer. «The Domino’s system has a lot to be proud of while also having opportunities to address. We experienced significant pressure on our U.S. delivery business in 2022 and focused our efforts on creating solutions. We also drove continued momentum in our U.S. carryout business and achieved strong international store growth. Over half of our orders in the U.S. now come through the carryout channel, and we are #1 in both the delivery and carryout QSR pizza segments. Our brand and company are better positioned than ever to win in the marketplace and create meaningful value for our shareholders.»
- Revenues increased USD 49.0 million, or 3.6 percent, in the fourth quarter of 2022 as compared to the fourth quarter of 2021, due primarily to higher supply chain revenues attributable to increases in market basket pricing to stores. The Company’s market basket pricing to stores increased 12.5 percent during the fourth quarter of 2022 as compared to the fourth quarter of 2021. The increase in revenues in the fourth quarter of 2022 was also a result of higher U.S. franchise royalties and fees and higher U.S. franchise advertising revenues driven primarily by the 2022 Store Sale and net store growth. The increase in U.S. franchise advertising revenues was also driven by approximately USD 6.0 million less in advertising incentives related to certain brand promotions in the fourth quarter of 2022 as compared to the fourth quarter of 2021. International franchise royalties and fees revenues increased due to international retail sales growth (excluding foreign currency impact) of 7.5 percent, but the resulting increase in international franchise revenues was partially offset by the negative impact of changes in foreign currency exchange rates of approximately USD 10.4 million. These increases in revenues were partially offset by lower U.S. Company-owned store revenues due to the 2022 Store Sale.
- Income from Operations increased USD 26.1 million, or 11.7 percent, in the fourth quarter of 2022 as compared to the fourth quarter of 2021 due primarily to the USD 21.2 million pre-tax gain recorded in connection with the 2022 Store Sale as well as lower general and administrative expenses due primarily to lower labor costs. This increase was partially offset by lower U.S. Company-owned store and supply chain gross margins.
- Net Income increased USD 2.6 million, or 1.7 percent, in the fourth quarter of 2022 as compared to the fourth quarter of 2021. This increase was driven primarily by higher income from operations due to the pre-tax gain recorded in connection with the 2022 Store Sale and lower general and administrative expenses, each as discussed above. Additionally, a lower provision for income taxes in the fourth quarter of 2022 also contributed to the increase in net income. The Company’s provision for income taxes decreased USD 9.0 million in the fourth quarter of 2022 due to a lower effective tax rate. The effective tax rate decreased to 16.6 percent during the fourth quarter of 2022 as compared to 20.6 percent in the fourth quarter of 2021, driven by the release of certain unrecognized tax benefits related to one of the Company’s foreign subsidiaries, and to a lesser extent, a 0.3 percentage point change in the impact of excess tax benefits from equity-based compensation, which are recorded as a reduction to the income tax provision. These increases in net income were partially offset by the USD 34.3 million pre-tax unrealized gain recorded in the fourth quarter of 2021 on the Company’s investment in DPC Dash Ltd (“DPC Dash”), the Company’s master franchisee that owns and operates Domino’s Pizza stores in China, resulting from the observable change in price from the valuation of the Company’s additional USD 9.1 million investment in DPC Dash made in the fourth quarter of 2021.
- Diluted EPS was USD 4.43 in the fourth quarter of 2022 versus USD 4.25 in the fourth quarter of 2021, representing a USD 0.18, or 4.2 percent, increase from the prior year quarter. The increase in diluted EPS was driven by higher net income in the fourth quarter of 2022 as compared to the fourth quarter of 2021. The gain resulting from the 2022 Store Sale contributed an incremental USD 0.46 to the Company’s diluted EPS in the fourth quarter of 2022 as compared to the prior year quarter. Diluted EPS in the fourth quarter of 2022 also benefited from a lower weighted average diluted share count, resulting from the Company’s share repurchases during the trailing four quarters. These increases were partially offset by the impact of the unrealized gain on the Company’s investment in DPC Dash in the fourth quarter of 2021 which contributed an incremental USD 0.68 to the Company’s diluted EPS in the fourth quarter of 2021 as compared to the fourth quarter of 2020.
