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Dominos Pizza (New York Stock Exchange: DPZ) leap 4.92% in premarket action Monday after comparable sales during the fourth quarter surpassed analysts' expectations.
The pizza restaurant operator reported fourth-quarter total domestic store comparable sales growth of 2.8% versus 2.2% consensus. Comparable sales increased 5.9% during company-owned stores vs. 2.6% consensus and were 2.6% for franchised locations vs. 2.1% consensus.
Gross margin at company-owned stores in the U.S. fell to 14.7% of sales from 16.3% of sales during the quarter. The decrease in gross margin was primarily due to higher labor costs as a result of higher salaries, higher insurance costs and the increase in loyalty liability resulting from the relaunch of the Domino's Rewards program. Those pressures were partially offset by higher same-store sales driven by a higher number of customer transactions and a decrease in the company's market basket prices. Supply chain gross margin rose to 10.9% of sales from 8.2% a year ago. Net income was $157.3 million compared to $158.3 million a year ago. EPS stood at $4.48, compared to the consensus of $4.40 and $4.43 a year ago.
Domino's (DPZ) posted net new store sales growth of 394 units during the quarter and ended with a total store count of 20,591.
CEO Update: “Domino's foundation has never been stronger. Our positive U.S. transactions and same-store sales growth in both our delivery and carryout channels in the fourth quarter underscore the strength and boost our business. These results give us confidence in our brand and the company's ability to earn and create significant value for our shareholders.”
The company also announced a new $1 billion share buyback program.
