Domino’s Pizza (NYSE:DPZ) on Thursday reported that its quarterly revenue rose 17.9%, led by more U.S. customers ordering pizza delivery during the coronavirus pandemic.
But earnings fell short of expectations, hurt by higher costs, and shares slipped $24.63, or 5.7%, to $406.42 in early Thursday trading.
The pizza chain reported fiscal third-quarter net income of $99.1 million, or $2.49 per share, up from $86.4 million, or $2.05 per share, a year earlier. Analysts expected earnings of $2.79 per share.
While the pandemic lifted sales, it also boosted costs for the company. Higher wages for frontline workers and enhanced sick pay hurt its earnings. And increased sales also resulted in higher compensation based on performance.
Net sales rose 17.9% to $968 million, topping expectations of $953 million. U.S. same-store sales rose 17.5%. The company said that sales in its home market were "positively impacted" by changes to customer behavior as a result of the pandemic. Its international business reported same-store sales growth of 6.2%.
As of Oct. 5, fewer than 300 of Domino’s international locations are temporarily shuttered. During the quarter, the company permanently closed 126 restaurants, primarily in India. Domino’s added 83 net new locations.
In the second quarter, due to the uncertainty caused by the crisis, Domino’s borrowed $158 million under its variable funding notes. It has since repaid that debt.
Related Stories
