On July 18, 2024, Domino's Pizza Inc (DPZ, Financial) released its 8-K filing for the second quarter of 2024. Domino's, the largest pizza company in the world, operates nearly 20,600 global stores across more than 90 international markets. The company generates revenue through sales at company-owned stores, royalties and marketing contributions from franchise-operated stores, and its extensive supply chain network.
Performance Overview
Domino's Pizza Inc (DPZ, Financial) reported a notable performance in the second quarter of 2024, surpassing analyst estimates. The company achieved a diluted earnings per share (EPS) of $4.03, significantly higher than the estimated $3.66. Revenue for the quarter reached $1.18 billion, exceeding the estimated $1.10 billion.
Key Financial Achievements
Domino's reported a 7.2% increase in global retail sales growth, excluding foreign currency impact. U.S. same-store sales grew by 4.8%, while international same-store sales, excluding foreign currency impact, increased by 2.1%. The company also saw a global net store growth of 175 stores during the quarter.
Income Statement Highlights
Income from operations increased by 0.4%, or $0.7 million, compared to the same period last year. Excluding the negative impact of foreign currency exchange rates, income from operations rose by 1.7%. Net income saw a substantial increase of 29.8%, amounting to $32.6 million, primarily driven by unrealized gains associated with the remeasurement of the company's investment in DPC Dash Ltd.
Balance Sheet and Cash Flow
Net cash provided by operating activities was $274.2 million for the first two fiscal quarters of 2024, compared to $242.3 million in the same period of 2023. Capital expenditures amounted to $43.7 million, resulting in a free cash flow of $230.5 million, up from $204.3 million in the previous year.
Operational Metrics
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Global Retail Sales (in millions) | $4,428.2 | $4,209.9 |
| U.S. Same Store Sales Growth | 4.8% | 0.1% |
| International Same Store Sales Growth (excluding foreign currency impact) | 2.1% | 3.6% |
| Net Store Growth | 175 | 143 |
Challenges and Strategic Initiatives
Despite the positive results, Domino's faced challenges such as higher insurance and labor costs, which impacted the gross margin of U.S. company-owned stores. However, the company's "Hungry for MORE" strategy has shown promising results, driving profitable order count growth in both delivery and carryout businesses.
"Our year-to-date performance demonstrates that our Hungry for MORE strategy is off to a great start, having an immediate impact on sales and profits," said Russell Weiner, Domino’s Chief Executive Officer.
Future Outlook
Domino's continues to expect annual global retail sales growth of 7% or more and annual income from operations growth of 8% or more from 2024 to 2028. The company also anticipates global net store growth of 825 to 925 in 2024, although challenges faced by its master franchisee in international markets may impact these numbers.
For more detailed information, please refer to the full 8-K filing.
Explore the complete 8-K earnings release (here) from Domino's Pizza Inc for further details.
