Domino's Pizza CFO announces new $1 billion share buyback program

Domino's sticking to growth plan despite sales pressures

Domino's sticking to growth plan despite sales pressures

During the third quarter of 2019, the Company repurchased and retired 384,338 shares of its common stock under its Board of Directors-approved share repurchase program for approximately $93.7 million, or an average price of $243.79 per share. Worldwide same-store sales were up 1.7%, but also missed forecasts of 2.9% growth. Argus dropped their price target on shares of Domino's Pizza from $310.00 to $280.00 and set a buy rating for the company in a research note on Wednesday, July 17th.

Looking ahead, Domino's sees global retail sales growing 7 percent to 10 percent over the next two to three years and 8 percent to 12 percent over the next three to five years.

"It was a good quarter for Domino's as we continue to lean on our fundamental strength against a unique competitive environment", CEO Ritch Allison said in a news release, citing strong unit growth and positive same-store sales.

The pizza chain, one of the modern faces of pizza delivery, faces competition from the aggressive promotions and wider range of food offered by aggregators such as Uber Eats, Postmates and GrubHub. US same store sales grew 2.4% during the quarter versus the prior year quarter, continuing the positive sales momentum in the Company's USA business.

It said it now expects same-store sales at its United States stores to rise 2 percent to 5 percent and its global segment to grow 1 percent to 4 percent in two to three years, compared with a previous 3 percent to 6 percent growth at either segment over three to five years.

The slowing growth has anxious Wall Street, which has sent Domino's stock down 13% over the past year.

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But executives this year have also acknowledged that third-party delivery services have played a role in the softening results of late.

Domino's said on Tuesday that its same-store sales last quarter entirely from ticket growth, and that it was weakest in its delivery business, a sign that third-party delivery and fortressing are eating into sales. Carryout now represents 45% of the company's sales, and Allison noted that the carryout segment overall is "significantly larger than the delivery segment".

USA same-store sales grew 2.4%, which was below analysts' projections of a 2.8% increase.

Analysts expecting growth of 2.8% in the key retail sales metric.

Domino's on Tuesday reported $820.8 million in revenue for its fiscal third quarter ended September 8, up about 4% compared with a year ago but weaker than predictions from Wall Street analysts, according to FactSet.

Currently, this company's share volume is sitting at $2,012,171, but has maintained average daily volume of $936.50K.

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