Domino’s Pizza has released its financial results for the third quarter of 2023. The company reported a 4.9% growth in global retail sales when excluding the impact of foreign currency.
However, growth reached 5.1% when also excluding the closure of the Russia market, which played a significant role in the results. Without any currency adjustments but excluding Russia, global retail sales grew by 5.3% during the same period.
During the third quarter of 2023, the US experienced a 0.6% decline in same-store sales. In contrast, international same-store sales, when excluding foreign currency impact, saw growth of 3.3%.
The company’s diluted earnings per share (EPS) for the same quarter was $4.18, marking a substantial 49.8% increase compared to the previous year.
Impact of Russia market closure
The closure of the Russia market had a significant impact on the company’s results.
Following the announcement of its master franchisee’s intent to file for bankruptcy in August 2023, Domino’s excluded the Russia market from its fiscal 2023 statistical measures, including net store growth and global retail sales growth.
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The company has not received any royalties and fees from the operations in the Russia market since the Russian invasion of Ukraine in February 2022.
The company reported a net store decline of eight stores in the third quarter of 2023. This decline consisted of 27 net US store openings and 35 net international store closures.
However, if we exclude the impact of the Russia market closure, there was a net store growth of 135 stores during the same period.
Revenues and financial health
Revenues decreased by $41.2m (3.9%) in the third quarter of 2023 compared to the third quarter of 2022. This decrease was primarily due to lower supply chain revenues and lower U.S. Company-owned store revenues.
The supply chain revenue decrease was attributed to reduced market basket pricing to stores and lower order volumes. US Company-owned store revenues decreased due to the refranchising of 114 US Company-owned stores in Arizona and Utah in the fourth quarter of 2022.
Positive outlook for the future
Domino’s CEO Russell Weiner expressed optimism for the future, stating: “We continue to execute on our initiatives to drive sustainable growth in the US.”
Weiner highlighted their ‘Summer of Service’ initiative and the success of Domino’s Rewards in engaging more customers.
The company is also focusing on its integration with Uber’s marketplace and anticipates incremental orders from these efforts in 2024 and beyond.