Domino’s Pizza(US:DPZ)2025-04-28 10:10Retail Sales Performance - Global retail sales for the first quarter of 2025 reached $4,464.3 million, a 2.3% increase compared to $4,364.1 million in the first quarter of 2024[74]. - U.S. retail sales increased by 1.3% to $2,240.8 million, while international retail sales, excluding foreign currency impact, grew by 8.2% to $2,223.5 million[76][77]. - Same store sales in U.S. stores declined by 0.5%, while international same store sales, excluding foreign currency impact, increased by 3.7%[79]. Store Count and Operations - The total number of stores decreased by 8, with 17 net store openings in the U.S. and 25 net store closures internationally[77]. - The company aims to expand its store count and enhance profitability through its "Hungry for MORE" strategy, focusing on sales growth and operational excellence[70][68]. - The franchise model continues to provide strong returns, with approximately 99% of global stores operated by independent franchisees[64]. Financial Performance - Total revenues for the first quarter of 2025 were $1,112.1 million, a 2.5% increase from $1,084.6 million in the first quarter of 2024[84]. - Income from operations decreased by 0.2% to $210.1 million in the first quarter of 2025 compared to $210.4 million in the first quarter of 2024[82]. - Net income for the first quarter of 2025 was $149.7 million, representing a 19.0% increase from $125.8 million in the first quarter of 2024[82]. Revenue Streams - Supply chain revenues increased by 1.1% to $669.9 million, driven by a 4.8% increase in food basket pricing[84]. - U.S. company-owned store revenues decreased by $1.0 million, or 1.1%, in Q1 2025, with same store sales declining by 2.9%[86]. - U.S. franchise royalties and fees revenues increased by $0.5 million, or 0.3%, in Q1 2025, with same store sales declining by 0.4%[87]. - U.S. franchise advertising revenues increased by $13.7 million, or 12.4%, in Q1 2025, due to a return to the standard advertising contribution rate[88]. - International franchise royalties and fees revenues increased by $3.6 million, or 5.0%, in Q1 2025, despite a $3.2 million negative impact from foreign currency exchange rates[90]. Margins and Expenses - Consolidated gross margin increased by $21.2 million, or 5.0%, in Q1 2025, with gross margin percentage rising to 39.8%[93][94]. - U.S. company-owned store gross margin decreased by $1.5 million, or 9.3%, in Q1 2025, with gross margin percentage declining to 16.0%[95]. - General and administrative expenses increased by $8.1 million, or 8.0%, in Q1 2025, primarily due to severance expenses[99]. Tax and Debt - Provision for income taxes increased by $19.0 million, or 80.1%, in Q1 2025, with the effective tax rate rising to 22.3%[103]. - As of March 23, 2025, the company had approximately $4.98 billion in long-term debt, with $1.15 billion classified as a current liability[116]. - The company expects to refinance the 2018 7.5-Year Notes and 2015 Ten-Year Notes prior to their anticipated repayment date in October 2025[117]. Shareholder Returns - The company repurchased and retired 115,280 shares of common stock for approximately $50.0 million in Q1 2025, with a remaining authorized amount for share repurchases of approximately $764.3 million[120]. - A quarterly dividend of $1.74 per share was declared on February 19, 2025, with approximately $61.4 million accrued for common stock dividends as of March 23, 2025[121]. Cash Flow - Net cash provided by operating activities increased by $55.6 million in Q1 2025 compared to Q1 2024, totaling $179.1 million[123]. - Cash used in investing activities was $16.0 million in Q1 2025, primarily for capital expenditures of $14.7 million[125]. - Cash used in financing activities was $51.9 million in Q1 2025, including $50.0 million for common stock repurchase and $8.2 million for tax payments related to restricted stock[126]. Currency Risks - Approximately 6.8% of total revenues in Q1 2025 were derived from international franchise operations, which are subject to foreign currency exchange risks[134]. - A hypothetical 10% adverse change in foreign currency rates could have resulted in a negative impact on royalty revenues of approximately $7.4 million in Q1 2025[134]. - The company had a Holdco Leverage Ratio of less than 5.0x as of the end of Q1 2025, allowing for the classification of certain notes as long-term debt[116].