Why Domino's Pizza Shares Are Sliding Today

Domino's Pizza Inc DPZ reported a second-quarter FY23 sales decline of 3.8% year-on-year to $1.02 billion, missing the analyst consensus of $1.07 billion.

The revenue decrease was primarily due to lower supply chain revenues attributable to the reduction in the company's market basket pricing to stores, as well as lower order volumes.

Global retail sales increased 5.8%, excluding the negative impact of foreign currency. Without adjusting for the impact of foreign currency, global retail sales grew 4.3%.

Same-store sales in the U.S. grew 0.1%, while International same-store sales (excluding foreign currency impact) increased 3.6%.

The company had global net store growth of 197 stores, comprised of 27 net U.S. store openings and 170 net international store openings. 

Gross margin for the quarter expanded 320 basis points to 39.5%. Operating margin for the quarter expanded 240 basis points to 19.1%.

EPS of $3.08 beat the analyst consensus of $3.05.

The company held $277 million in cash and equivalents as of June 18, 2023.

Operating cash flow for the six months totaled $242.3 million, with a free cash flow of $204.3 million.

On July 20, 2023, the company's Board of Directors declared a $1.21 per share quarterly dividend on its shares of record as of September 15, 2023, to be paid on September 29, 2023.

In Q2, the company repurchased and retired 292,030 shares of common stock for a total of $90.8 million. As of June 18, it had a total remaining authorized amount for share repurchases of $289.5 million.

Price Action: DPZ shares are trading lower by 4.52% at $368.00 in premarket on the last check Monday.