Domino’s profit, comparable sales rise on higher fees from franchisees

Domino’s Pizza Inc reported a 42 percent rise in quarterly profit yesterday and comfortably beat analysts’ samestore sales estimates as the pizza company earned higher royalties and fees from its franchisees.

The company’s shares rose as much as 8 percent to US $ 252 in premarket trading, setting it up for a record high yesterday.

Same-store sales at its companyowned outlets in the United States rose 6.4 percent and franchise stores posted an 8.4 percent growth, both well above Wall Street expectations.

Analysts on average were expecting same-store sales to rise 4.93 percent at company-owned U.S. stores and 5.63 percent at its franchise stores, according to Thomson Reuters I/B/E/S.

Comparable store sales in its international business rose 5 percent, beating the average analyst estimate of 4.1 percent.

Domino’s benefits from the royalty fee it charges its franchise stores and the revenue it gets from ingredients and equipment it supplies to them.

Supply chain revenue from its franchisees rose 13.3 percent to US $ 440.1 million in the quarter.

Net income rose to US $ 88.8 million, or US $ 2.00 per share, in the first-quarter ended March 25, from US $ 62.5 million, or US $ 1.26 per share, a year earlier.

Excluding items, Dominos earned US $ 2.00 per share, above the US $ 1.77 analysts on average had estimated, according to Thomson Reuters I/B/E/S.

Total revenue rose about 26 percent to US $ 785.4 million. Analysts on average had forecast US $ 691.9 million.