By Candice Choi
AP Food Industry Writer
NEW YORK (AP) - Domino's reported a higher quarterly profit last Thursday as a jump in pizza orders drove up sales in the U.S.
The pizza delivery company said sales surged 14.5 percent at established Domino's locations in the U.S., reflecting stronger order growth and, to a lesser degree, higher average spending per order.
CEO Patrick Doyle said the jump in sales was partly the result of an improving job market.
"Employed people buy more pizza than unemployed people," he said during a conference call.
Other factors that have played a role include Domino's digital ordering options that make it an even more convenient option, and a new advertising campaign that notes it's dropping the "pizza" from its store names to underscore that it serves other types of food, like a fried chicken item that comes with toppings.
Domino's is also taking market share from other players, Doyle said, but still sells about only one out of every eight pizzas in the country.
Earlier in the week, Yum Brands said sales at established Pizza Hut locations in the U.S. declined 1 percent. Yum CEO Greg Creed conceded in a conference call that the chain was being "outperformed by the competition." To improve results, Pizza Hut recently revamped its menu to let people build their own pies with a wider range of crust flavors and toppings. But Creed said the marketing hasn't been "as effective as we'd like," and that the company needs to "balance its appeal to millennials with mainstream pizza customers."
Mark Kalinowski, a Janney Capital Markets analyst, noted that Domino's 14.5 percent sales growth at established locations in the U.S. was likely to be the best showing among the 25 largest restaurant companies in the country. For Domino's, he said it was highest quarterly jump in at least 16 years.
In the past, Doyle has said the digital ordering offered by major pizza chains would help them take away business from independent and smaller regional players.
Overseas, sales at established Domino's locations rose 7.8 percent during the quarter. That marked 85 straight quarters of growth, Kalinowski noted, and could partly be explained by the "universal appeal of pizza."
The Ann Arbor, Michigan-based company has more than 5,000 U.S. locations and more than 6,600 international locations.
For the quarter, Domino's Pizza Inc. said profit rose 14 percent to $46.3 million, or 81 cents per share. Analysts expected 80 cents per share, according to Zacks Investment Research.
Total revenue was $502 million in the period, also topping the $488.3 million analysts expected.
Published: Mon, Apr 27, 2015
