An worker carries an order for a buyer at a Domino’s Pizza restaurant in Detroit.
Sean Proctor | Bloomberg | Getty Photos
Domino’s Pizza on Tuesday introduced a C-suite shake-up and quarterly outcomes that missed expectations on most metrics, sending the inventory sharply decrease.
The pizza chain posted fourth-quarter earnings and income that fell in need of analysts’ expectations and in addition introduced that CEO Ritch Allison plans to retire. Chief Working Officer and U.S. President Russell Weiner will succeed him as head of the corporate, efficient Might 1.
Shares of the corporate have been down roughly 8% in morning buying and selling.
Here is what the corporate reported for the quarter ended Jan. 2 in contrast with what Wall Road was anticipating, primarily based on a survey of analysts by Refinitiv:
- Earnings per share: $4.25 vs. $4.28 anticipated
- Income: $1.34 billion vs. $1.38 billion anticipated
The pizza chain reported fourth-quarter internet revenue of $155.7 million, or $4.25 per share, up from $151.9 million, or $3.85 per share, a yr earlier. Analysts surveyed by Refinitiv have been anticipating earnings per share of $4.28.
Web gross sales dropped 1% to $1.34 billion, lacking expectations of $1.38 billion. The corporate stated forex fluctuations, an additional week in 2020 and promoting incentives from promotions contributed to the fourth quarter’s decline in income.
U.S. same-store gross sales rose simply 1% within the quarter, dragged down by weak efficiency by Domino’s company-owned eating places. Analysts have been anticipating U.S. same-store gross sales development of two.9%, in response to StreetAccount estimates.
After demand for Domino’s pizza and wings soared in the course of the early days of the pandemic, the corporate has confronted powerful year-over-year comparisons. It has additionally needed to reckon with a labor crunch that has resulted in shortened hours for some U.S. areas.
Outdoors the U.S., the chain’s efficiency additionally disillusioned. Worldwide same-store gross sales rose 1.8% within the quarter, falling in need of StreetAccount estimates of 6.6%.
The corporate added 468 internet new areas in the course of the quarter. Greater than 80% of these new eating places are positioned exterior the U.S.
In January, the company reiterated its two- to three-year outlook of world retail gross sales development of between 6% and 10% and internet unit development of between 6% and eight%.
The chain would not present quarterly or annual earnings forecasts, nevertheless it did say it expects prices for elements to climb wherever from 8% to 10% in 2022, roughly three to 4 instances the inflation for a standard yr.
Management shake-up
After he steps down as CEO, Allison will proceed to function an advisor till July 15, when he formally retires. He plans to stay on the corporate’s board till the annual shareholder assembly on April 26. Allison has been CEO of the pizza chain since July 2018.
His successor, Weiner, has labored for Domino’s since 2008, when he helped kickstart the corporate’s turnaround plan as chief advertising officer. He has served as COO and U.S. president since July 2020.
The corporate additionally introduced it has tapped Sandeep Reddy as its subsequent chief monetary officer, efficient April 1. Reddy is at the moment serving as CFO of Six Flags, though he introduced on Monday that he’ll resign March 27. Previous to Six Flags, he served in the identical position for Guess. Domino’s earlier CFO Stu Levy resigned in Might after lower than a yr on the job.
“With Russell as CEO and with the addition of Sandeep as CFO, supported by the remainder of our management workforce, I’m snug and assured stepping apart, figuring out that Domino’s has sturdy leaders who’re passionate and dedicated to our enterprise,” Allison stated in a press release.
Correction: Domino’s internet gross sales dropped 1% within the fourth quarter of 2021. A earlier model misstated the year-over-year change.
