Domino’s Pizza stock fell on Tuesday after the pizza maker released mixed quarterly earnings results for its first few months under Ritch Allison’s leadership.
For the 2018 third quarter, the pizza chain, based in Ann Arbor, Michigan, posted an $84.1 million profit, which was up by 49% from the same three month period during 2017. The quarter was a benefactor of higher worldwide royalties and volumes of supply-chain from increased sales along with tax cuts and the sale of 12 stores that were company owned to new franchisees.
The stock price for Domino’s is up by 47% over the last year, though shares fell on Tuesday by 5% after the company’s quarterly revenue and sales at domestic same stores came up short of expectations on Wall Street.
Domino’s posted diluted per share earnings of $1.95 for its third quarter, which beat expectations on Wall Street of $1.75, but revenue came up short of a projected increase of 23% to $790 million. Sales at Domino’s ended the quarter at $786 million.
Domestic sales at same stores, missed the growth of 6.5% Wall Street was expecting, as they were up just less at 6.3%, but were the 30th straight quarter with growth.
Following comments that created controversy by John Schnatter the now-former chairman of Papa John’s Pizza, analysts were expecting Pizza Hut to receive the biggest benefit.
Allison said that Papa John’s share of the market is small and its effect is not that heavy as one may believe. Allison added that Domino’s was focused on its growth strategy and not the ups and down over the short term of any one of its competitors.
Sales at same stores for international locations beat Wall Street expectations of 3.2% growing by 3.3% from the same period last year. Domino’s CFO Jeff Lawrence said the pizza maker experienced growth in each of its regions except for Europe, though the Domino’s CEO Allison said he was optimistic about the opportunities in Russia.
During the third quarter, 232 net new locations were added by Dominos consisting of 59 stores in the US, and 173 international stores. The company had a pair of stores close across the U.S. and 19 outside the U.S.
Thus far in 2018, Domino’s has added 499 net new locations.