Domino’s Serves Partially Hydrogenated Earnings (DPZ)

By Douglas A. McIntyre Updated Apr 27, 8:28PM EDT · Published Oct 14, 8:19AM EDT

Dominos_logo Domino’s Pizza Inc. (NYSE: DPZ) is looking more and more troubled. The company has given a poor earnings report and it is facing much more important top-line issues. This is showing up in franchise-owned stores and its company-owned stores. So what happened on its earnings?

The company said that excluding a gain on the sale of company-ownedstores and income-tax benefits, it earned $0.13. First Call estimates were for $0.21. But here is the kicker: revenue were down4.1% year- -over-year to $323.6 million, while First Call had estimatesat $336.8 million. Same store sales fell 3.4% at domesticcompany-owned stores and fell 6.4% at domestic franchise stores. Atleast it is growing internationally.

What is interesting here is that the company does note the high costsfaced by its operators as consumers are reluctant tospend. In the past, pizza chains have been unable to mitigate cheesecosts as their main issue. But worry about the economy, should not keep peoplefrom being able to eat pizza at affordable chains like Domino’s.

Some pizza is a semi-luxury by the price of it, but Domino’s has alwaysbeen one of the bargains out there for families ordering pizza. Three medium one-topping pizzas at $5.55 per pizza isn’t exactly a stretchfor families wanting to save money. Its sandwich, chips, and soda for$6.99 might not be a steal, but this sounds much more like there areother issues. Maybe pizza eaters are choosing to buy their pieselsewhere.

Jon C. Ogg
October 14, 2008

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

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A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.