Domino's Pizza Inc.
) reported fourth-quarter 2012 adjusted earnings of 64 cents per
share, well ahead of the Zacks Consensus Estimate of 59 cents and
the year-ago adjusted earnings of 52 cents. In full year 2012,
adjusted earnings were $2.02 per share versus $1.69 in the prior
The strong quarterly results were attributable to same-store
sales (comps) growth in both international and domestic markets
along with unit growth, share repurchase activity and margin
Total revenues nudged up 7.6% year over year in the quarter to
$539.7 million and surpassed the Zacks Consensus Estimate of $530
million. The increase in revenues was aided by improved volumes,
enhanced comps at domestic and international markets and higher
international unit growth. In 2012, the company reported revenues
of $1.7 billion, up 1.6% year over year.
Inside the Headline Numbers
During the reported quarter, the company's overall domestic
comparable sales grew 4.7% with company-owned units and
franchises rising 2.5% and 4.9%, respectively. However, comps
took a higher jump in the overseas markets recording growth of
5.2%. Global retail sales were up 9.7% and 9.4% (excluding the
effect of foreign currency translation).
The company's operating margin expanded 90 basis points (bps)
to 29.8% in the reported quarter, driven by the rise in
company-owned store' operating margins and flat commodity basket.
Margin also gained from change in revenue mix.
During the reported quarter, Domino's opened and closed a
respective of 49 and 18 franchised stores, bringing the total
domestic store count to 4,928.
Internationally, the company opened 223 and shut down 40
stores to bring the tally to a total of 5,327 international
At the end of the reported quarter, Domino's Pizza had cash and
cash equivalents of $54.8 million versus $34.6 million in the
third quarter of 2012. Long-term debt (less current portion) in
the quarter was $1,536.4 million as compared with $1,542.5
million in the prior quarter.
Share Repurchase & Dividend
The company bought back as well as retired 1,136,648 and
2,472,863 shares worth $45.5 million and $88.2 million during the
fourth quarter and full year 2012, respectively.
The company is scheduled to pay its dividend of 20 cents per
share on Mar 29, of record at the close of business on Mar 15,
In the long term, management continues to expect domestic and
international same-store sales growth of 1% to 3% and 3% to 5%,
Domino's Pizza's store level economics are strong and are
driving growth. Additionally, to drive traffic, management
continues to focus on menu innovation, promotional activities and
improved execution in its corporate and franchise stores.
However, unfavorable effect on currency translation remains a
huge cause of concern.
Domino's Pizza currently retains a Zacks Rank #2 (Buy).
Red Robin Gourmet Burgers Inc.
) adjusted earnings in the fourth quarter of 2012 were way ahead
of the Zacks Consensus Estimate as well as the year-ago quarter's
earnings. Red Robin Gourmet currently carries a Zacks Rank #1
Other restaurant companies like
Krispy Kreme Doughnuts, Inc.
Burger King Worldwide, Inc
) both with a Zacks Rank #2 (Buy) are expected to perform well,
BURGER KING WWD (BKW): Free Stock Analysis
DOMINOS PIZZA (DPZ): Free Stock Analysis
KRISPY KREME (KKD): Free Stock Analysis
RED ROBIN GOURM (RRGB): Free Stock Analysis
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