Domino’s Pizza, Inc. (NYSE:DPZ) announced its fourth-quarter fiscal 2023 results, revealing a mixed performance with earnings surpassing expectations but revenues falling short. Nonetheless, both figures showed year-over-year growth, leading to a 5% increase in the company’s stock during pre-market trading.

Earnings & Revenue Highlights

Adjusted earnings per share (EPS) for the quarter stood at $4.48, beating the Consensus Estimate of $4.37. This marked a 1.1% increase from the $4.43 reported in the same quarter last year.

On the revenue front, Domino’s reported $1,403 million, slightly missing the consensus estimate of $1,416 million. However, this represented a 0.8% increase compared to the previous year. The revenue growth was primarily driven by higher global franchise royalties and fees, supported by global retail sales growth and increased supply-chain revenues. These gains were partially offset by a decline in U.S. franchise advertising revenues.

Other Financial Metrics

Domino’s witnessed 431 gross store openings and 37 gross store closures during the fourth quarter of fiscal 2023.

Global retail sales, excluding foreign currency impact, increased by 4.9% year over year, driven by higher international store sales (up 5.2% year over year) and U.S. store sales (up 4.5% year over year).

Comparable store sales at Domino’s domestic stores (including company-owned and franchise stores) grew by 2.8% year over year, exceeding our model’s prediction of a 1.1% increase.

Margins & Balance Sheet

Domino’s gross margin expanded by 160 basis points year over year to 38.4% in the fiscal fourth quarter. However, the net income margin decreased slightly by 20 basis points to 11.2% compared to the same quarter last year.

As of December 31, 2023, cash and cash equivalents totaled $114.1 million, up from $60.4 million at the beginning of the year. Long-term debt stood at $4,934.1 million, and inventory amounted to $83 million.

Capital expenditure for the quarter totaled $105.4 million, and the company repurchased and retired 167,572 shares for $58.2 million.

Long-Term Guidance

For the period of 2024-2028, Domino’s anticipates more than 7% annual global retail sales growth, over 1,100 annual global net store growth, and more than 8% annual income growth from operations.

Additionally, management announced a 25% increase in the cash dividend to $1.51 per share, payable on March 29, 2024, to shareholders of record as of March 15, 2024.

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