Domino's profit jumps on stronger sales, online ordering surge

IndustriesAssociated Press

Domino's reported a higher profit for the fourth quarter as pizza delivery sales rose at home and abroad.

The company said sales surged 11.1 percent at established U.S. locations for the period ended Dec. 28. Overseas, the figure rose 6.1 percent.

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Domino's, based in Ann Arbor, Michigan, has been driving sales at home by acknowledging the taste of its pizza needed work and touting its improved recipes. In ads that began in 2010, for instance, the company noted its sauce tasted like ketchup and its crust tasted like cardboard.

More recently, Domino's has also focused on expanding digital sales, saying the convenience of online ordering for customers positions it to take market share from smaller, independent pizza places that don't have the resources to develop such technology.

In an earnings conference call, Domino's CEO Patrick Doyle said half of orders are now coming from digital channels, including mobile devices.

For 2014, Domino's said U.S. sales rose 7.5 percent at established locations. By contrast, Pizza Hut saw sales decline by 1 percent for the year.

For the quarter, Domino's Pizza Inc. said it earned $48 million, or 85 cents per share. Not including one-time items, it earned 91 cents per share, which was shy of the 93 cents per share analysts expected, according to FactSet. Shares of Domino's slipped 63 cents to $103.87.

A year ago, Domino's earned $44.7 million, or 78 cents per share.

Revenue rose 13.5 percent to $643 million during the period, boosted by higher prices for the ingredients it sells to franchisees and sales of equipment to stores that are renovating their locations. Wall Street expected revenue of $616.2 million.

Domino's had 5,067 U.S. locations at the end of the period and 6,562 international locations.