Domino's Pizza sales soar despite fast-food slowdown

AP News
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Posted: Oct 18, 2016 2:46 PM
Domino's Pizza sales soar despite fast-food slowdown

ANN ARBOR, Mich. (AP) — Americans are apparently still hot for home-delivered pizza: Domino's Pizza posted a jump in sales in the last quarter, even as other fast-food companies have reported weaker sales growth.

Domino's also reported better-than-expected third-quarter earnings and revenue, and its shares jumped to an all-time high Tuesday.

Rivals McDonald's, Wendy's and Burger King have blamed weaker-than-expected growth on cheaper groceries, political uncertainty and other factors, but Domino's didn't report any of those problems Tuesday. It said that sales at U.S. stores open at least a year — considered an important measure of a retailer's health — rose 13 percent in the last quarter from the year before. That's above the 8 percent rise analysts had expected, according to FactSet.

The company's year-old loyalty program "significantly" increased orders, Domino's Chief Financial Officer Jeffrey Lawrence, said in a conference call with investors and Wall Street analysts. Customers earn a free pizza after they spend a certain amount on online orders.

Easy online ordering may also be helping. Paul Westra, an analyst at Stifel, said in a note to clients that Domino's is in the "forefront" of how Americans want to order and pay for food. Beginning last month, for example, customers could order a pizza through Facebook's Messenger app. Before that, users could text or tweet a pizza emoji to Domino's to send in their order. In April, it launched a no-click smartphone app that automatically orders when the app is opened.

For the quarter that ended Sept. 11, the company posted net profit of $47.2 million, or 96 cents per share, up from $37.8 million, or 67 cents per share, in the same quarter a year ago. Revenue rose 17 percent to $566.7 million in the period. Both earnings and revenue beat Wall Street expectations, according to Zacks.

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Shares of Domino's Pizza Inc., based in Ann Arbor, Michigan, rose $10.99, or 7.2 percent, to $163 in afternoon trading Tuesday. Earlier, the stock touched an all-time high of $163.73.

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Elements of this story were generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on DPZ at http://www.zacks.com/ap/DPZ

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Keywords: Domino's Pizza, Earnings Report