An employee holds an order for a customer at Domino’s Pizza in Detroit.
Sean Proctor | Bloomberg | Getty Images
Domino’s Pizza On Tuesday, it announced a revised C-suite and quarterly results that beat expectations on most metrics, sending shares down sharply.
The pizza chain reported fourth-quarter earnings and revenue that didn’t live up to analyst expectations and also announced that CEO Rich Allison is planning to retire. He will be succeeded by Chief Operating Officer and US President Russell Weiner as the company’s president, effective May 1.
The company’s shares fell about 8% in morning trading.
Here’s what the company reported for the quarter ending January 2 compared to what Wall Street had been expecting, based on a survey of analysts by Refinitiv:
- Earnings per share: $4.25 vs. $4.28 expected
- Revenues: $1.34 billion vs. $1.38 billion forecast
The pizza chain reported fourth-quarter net income of $155.7 million, or $4.25 per share, up from $151.9 million, or $3.85 per share, a year earlier. Analysts polled by Refinitiv expected earnings per share of $4.28.
Net sales It fell 1% to $1.34 billion, missing expectations of $1.38 billion. The company said currency fluctuations, an additional week in 2020, and advertising incentives from promotions contributed to the decline in revenue in the fourth quarter.
Same-store sales in the US rose just 1% in the quarter, weighed down by the poor performance of Domino-owned restaurants. Analysts had expected same-store sales to grow 2.9%, according to StreetAccount estimates.
After high demand for Domino’s pizza and wings during the early days of the pandemic, the company faced tough year-over-year comparisons. It also had to reckon with a labor crisis that shortened working hours for some American locations.
Outside the United States, the series’ performance has also disappointed. International store sales rose 1.8% in the first quarter, below StreetAccount’s estimate of 6.6%.
The company added a net 468 new locations during the quarter. More than 80% of these new restaurants are located outside the United States
In January, the company reiterated Its forecast is for two- to three-year global retail sales growth of between 6% and 10% and net unit growth between 6% and 8%.
The chain does not provide a quarterly or annual profit forecast, but said it expects component costs to rise anywhere from 8% to 10% in 2022, roughly three to four times the inflation in a typical year.
After stepping down as CEO, Allison will continue to serve as a consultant until July 15, when he officially retires. He plans to remain on the company’s board of directors until the annual shareholder meeting on April 26. Allison has been the CEO of the pizza chain since July 2018.
His successor, Winner, has worked for Domino’s since 2008, when he helped start the company’s transformation plan as Chief Marketing Officer. He has served as Director of Operations and President of the United States since July 2020.
The company also announced that it has appointed Sandeep Reddy as its next Chief Financial Officer, effective April 1. Reddy is currently serving as Six Flags’ chief financial officer, although he announced on Monday that he will be resigning on March 27. Same role for Guess. Domino’s former CFO Stu Levy resigned in May after less than a year on the job.
Allison said in a statement.
Correction: Domino’s net sales fell 1% in the fourth quarter of 2021. An earlier version missed the annual change.
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