Image: Domino’s shares have advanced nicely since the beginning of 2023.
By Brian Nelson, CFA
Domino’s (DPZ) reported mixed fourth quarter results February 24, with revenue and GAAP earnings per share coming in lower than the consensus forecast, but the company raising its quarterly dividend 15%, to $1.74 per share. Global retail sales, excluding foreign exchange impact, in the fourth quarter grew 4.4%, with U.S. same store sales growth of 0.4% and International same store sales growth of 2.7%. Total revenues increased 2.9%, while income from operations advanced 6.4% in the fourth quarter. Diluted earnings per share increased 9.2%, to $4.89, in the quarter.
Management had the following to say in the press release:
Domino’s 2024 results demonstrated that our Hungry for MORE strategy can drive strong order count growth, even in the face of a challenging global macroeconomic environment. In our international business, we delivered a remarkable 31st consecutive year of same store sales growth, with our sales improving in the fourth quarter. In the U.S., leaning into our pillar of Renowned Value helped us once again generate meaningful market share growth in QSR Pizza. As we look ahead to 2025, I (Russell Weiner, Domino’s Chief Executive Officer) remain confident that Domino’s will continue to win and grow market share. This will increase our advantage as the #1 pizza company in the world, driving best in class results and long-term value creation for franchisees and shareholders.
For fiscal 2024, net cash provided by operating activities increased 5.8% on a year-over-year basis, while capital expenditures expanded 7.1%, resulting in free cash flow growth of 5.5%, to $512 million. The company experienced global net store growth of 775 for fiscal 2024, and we continue to like Domino’s future growth prospects. During the fourth quarter, the company repurchased a total of $112 million in stock, and as of December 29, had total remaining buyback authorization of $814.3 million. We like Domino’s long-term picture and include the firm as a holding in the Best Ideas Newsletter portfolio.
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Brian Nelson owns shares in SPY, SCHG, QQQ, QQQM, DIA, VOT, RSP, and IWM. Valuentum owns SPY, SCHG, QQQ, QQQM, VOO, and DIA. Brian Nelson’s household owns shares in HON, DIS, HAS, NKE, DIA, RSP, SCHG, QQQ, QQQM, and VOO. Some of the other securities written about in this article may be included in Valuentum’s simulated newsletter portfolios. Contact Valuentum for more information about its editorial policies.
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