Master franchisee problems lead to lower store opening targets for Domino’s

  • Domino’s Pizza shares drop 11% due to revenue miss and reduced store opening targets
  • Master franchisee issues impacting global net new store openings for Domino’s
  • U.S. same-store sales rise 4.8%, exceeding expectations
  • Domino’s expects annual income growth of over 8% excluding foreign currency
  • India and China remain key growth markets with potential for 1,000 stores each in future

Domino’s Pizza Inc.’s stock fell 11% after the pizza-delivery company’s better-than-expected fiscal second-quarter profit was overshadowed by a revenue miss. The Ann Arbor, Mich.-based company also disclosed issues with a master franchisee who has had to close restaurants in Japan and France in particular, which will prevent Domino’s from meeting its target for global net new store openings this year. Domino’s posted net income of $141.9 million, or $4.03 a share, for the quarter to June 16, up from $109.4 million, or $3.08 a share in the year-earlier period. Revenue rose to $1.098 billion from $1.025 billion a year ago. The FactSet consensus was for EPS of $3.68 and revenue of $1.103 billion. U.S. same-store sales rose 4.8%, while FactSet was expecting a rise of 3.1%. “For the second straight quarter we drove U.S. comp performance in the healthiest way possible, through profitable order count growth,” CEO Russell Weiner said in prepared remarks. “We had positive order counts in our delivery and carryout businesses, and across all income brackets.” Domino’s is temporarily suspending its guidance metric of more than 1,000 global net stores until the full effect of DPE’s openings and closures on international net store growth are known. For now, the company is focusing on key growth markets India and China with potential for 1,000 stores each in the future.

Factuality Level: 9
Factuality Justification: The article provides accurate and objective information about Domino’s Pizza Inc.’s financial performance, including their fiscal second-quarter profit, revenue, and growth expectations. It also discusses challenges faced by one of its master franchisees and the impact on global net new store openings. The article includes relevant details about the company’s plans for future growth and mentions the CEO’s comments on the situation. There is no sensationalism or personal perspective presented as a universally accepted truth, and the information is well-researched and reported.
Noise Level: 4
Noise Justification: The article provides relevant information about Domino’s Pizza Inc.’s financial performance and its plans for future growth, but it also includes some filler content such as unrelated advertisements and promotional statements. It could have been more concise and focused on the main points without diving into unrelated topics.
Public Companies: Domino’s Pizza Inc. (DPZ), Domino’s Pizza Enterprises (DMP)
Key People: Russell Weiner (CEO), Sandeep Reddy (Chief Financial Officer)

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Financial Relevance: Yes
Financial Markets Impacted: Domino’s Pizza Inc.’s stock
Financial Rating Justification: The article discusses the financial performance of Domino’s Pizza Inc., including their fiscal second-quarter profit, revenue miss, and impact on global net new store openings due to issues with a master franchisee. It also mentions the company’s expectations for future growth and its stock performance.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Extreme Rating Justification: There is no extreme event mentioned in the article. The stock market performance of Domino’s Pizza Inc. experienced a decline, but it is not considered an extreme event as it is related to financial performance rather than a crisis or disaster.

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