Domino's Pizza Q2 Bottom-Line Lags Street View As Inflation Bites

Domino's Pizza Inc DPZ reported second-quarter FY22 sales growth of 3.2% year-on-year, to $1.06 billion, beating the consensus of $1.05 billion.
Global retail sales increased 1.5%, excluding the negative impact of foreign currency. Without adjusting for the impact of foreign currency, global retail sales declined 3.0%.
Same-store sales in the U.S. fell 2.9%, while International same-store sales (excluding foreign currency impact) increased 2.2%.
The gross margin for the quarter contracted 320 basis points to 36.3%.
The operating margin for the quarter compressed 180 basis points to 16.7%.
EPS of $2.82 missed the analyst consensus of $2.88.
The company held $114.4 million in cash and equivalents and had a total debt of $5.05 billion as of June 19, 2022.
Net cash provided by operating activities for six months was $153.4 million, with a free cash flow of $120.8 million as of June 19, 2022.
"We continued to navigate a difficult labor market, especially for delivery drivers, in addition to inflationary pressures combined with COVID and stimulus-fueled sales comps from the prior two years in the U.S.," said CEO Russell Weiner.
Outlook: Dominos expects FY22 food basket pricing increase of 13% - 15% (previously 10% - 12%).
It expects FY22 capital expenditure of $120 million.
Price Action: DPZ shares are trading higher by 0.02% at $410.04 on the last check Thursday.
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