Domino’s Pizza(DPZ) - 2025 Q2 - Quarterly Results

Global Retail Sales and Store Growth - Global retail sales growth (excluding foreign currency impact) of 7.2% in Q2 2024, with U.S. same store sales growth of 4.8% and international same store sales growth (excluding foreign currency impact) of 2.1%[2] - Global net store growth of 175 in Q2 2024[2] - Store count increased by 175 net stores in Q2 2024, with total stores reaching 20,930[22] - The company projects global net store growth of 825 to 925 in 2024, with 175+ net stores annually in the U.S. from 2024 to 2028[26] - International net store growth is expected to fall 175 to 275 stores below the 2024 goal of 925+ due to challenges faced by Domino's Pizza Enterprises (DPE)[26] - The company has temporarily suspended its guidance metric of 1,100+ global net stores until the impact of DPE's store operations is clear[26] - Global retail sales growth is driven by same store sales growth and net store growth, excluding foreign currency impact[27] Financial Performance and Net Income - Net income increased by $32.6 million, or 29.8$26.4 million change in pre-tax unrealized gains and losses from the remeasurement of the investment in DPC Dash Ltd[4] - Diluted EPS increased by $0.95, or 30.8$4.03 in Q2 2024 compared to $3.08 in Q2 2023[4] - Net income for Q2 2024 was$141.98 million, a 12.9% increase compared to $109.38 million in Q2 2023[16] - Net income increased to$267.8 million, up 25% from $214.2 million in the previous year[36] Cash Flow and Free Cash Flow - Net cash provided by operating activities was$274.2 million in the two fiscal quarters of 2024, up 13.2% from $242.3 million in the same period of 2023[4] - Free cash flow increased to$230.5 million in the two fiscal quarters of 2024, up 12.8% from $204.3 million in the same period of 2023[4] - The company uses "free cash flow" as a key metric, calculated as net cash provided by operating activities minus capital expenditures[27] - Net cash provided by operating activities rose to$274.2 million, a 13% increase from $242.3 million[36] - Capital expenditures totaled$43.7 million, up 15% from $38.0 million in the prior year[36] Revenue Growth - Total revenues increased by 7.1$1,097.7 million in Q2 2024 compared to $1,024.6 million in Q2 2023[6] - Revenues increased by$73.1 million, or 7.1%, in Q2 2024 compared to Q2 2023, driven by higher supply chain, U.S. franchise advertising, and U.S. franchise royalties and fees revenues[23] - Total revenues for Q2 2024 were $1.097 billion, up from$1.024 billion in Q2 2023[16] - U.S. franchise advertising revenues increased to $124.96 million in Q2 2024 from$111.46 million in Q2 2023[16] Gross Margin and Costs - U.S. Company-owned store gross margin decreased by 1.0 percentage point in Q2 2024 due to higher insurance and labor costs, partially offset by higher customer transaction counts[23] - Supply chain gross margin increased by 0.4 percentage points in Q2 2024, primarily due to procurement productivity, partially offset by investments in supply chain labor[23] Share Repurchases and Stock - The company repurchased and retired 56,372 shares of common stock for $25.0 million during the first two fiscal quarters of 2024[25] - As of June 16, 2024, the company had$1.12 billion remaining authorized for share repurchases[25] - Purchases of common stock decreased significantly to $25.0 million, down 79$120.8 million[36] - Proceeds from exercise of stock options surged to $31.5 million, compared to$1.1 million in the previous year[36] Cash and Cash Equivalents - Cash and cash equivalents increased to $283.7 million as of June 16, 2024, up from$114.1 million as of December 31, 2023[18] - Cash and cash equivalents, including restricted cash, grew to $560.7 million, up 38$405.8 million[36] - Change in cash and cash equivalents, including restricted cash, increased to $157.5 million, up 14x from$10.6 million[36] Leverage Ratio and Debt - Leverage ratio improved to 5.0x in the two fiscal quarters of 2024, down from 5.6x in the same period of 2023[6] - The leverage ratio improved to 5.0x from 5.6x[28] - Repayments of long-term debt decreased to $14.8 million, down 46$27.2 million[36] International Performance - International stores retail sales growth (excluding foreign currency impact) was 7.2% in Q2 2024, including the impact of the Russia market[3] - U.S. franchise stores same store sales growth of 4.8% in Q2 2024, compared to a decline of 0.1% in Q2 2023[5] Forward-Looking Statements and Risks - The company emphasizes the importance of understanding risks and uncertainties in forward-looking statements, including factors like foreign currency exchange rates and economic conditions[31] Equity-Based Compensation - Non-cash equity-based compensation expense increased to $22.0 million, up 29$17.1 million[36] Investments and Unrealized Gains/Losses - Unrealized loss on investments decreased to $7.3 million, down 51$15.0 million[36] Segment Income - The company's trailing four quarters segment income is $981,130, compared to$888,825 in the previous period[28] Annual Growth Expectations - The company expects 7%+ annual global retail sales growth and 8%+ annual income from operations growth, excluding foreign currency impact[26]