Domino's Pizza Inc. said Tuesday that its fiscal fourth-quarter profit more than doubled as sales picked up in the U.S. as curious consumers checked out the pizza chain's new recipes.
Its shares gained 59 cents, or 4.6 percent, to $13.33 in premarket trading.
Chairman and CEO David Brandon said traffic increased all of last year and has continued to grow in 2010. Domino's launched an ad campaign in December that criticized the pizza recipes it abandoned in favor of reformulated ones.
Executives have said that the chain decided to start overhauling its recipes more than 18 months ago after mounting criticism from focus groups and on social media sites. The plan appears to be paying off.
Domino's earnings surged to $23.6 million, or 41 cents per share, from $11 million, or 19 cents per share, a year earlier.
Taking out the positive impact of an extra week and other items totaling 11 cents per share, profit was 30 cents per share.
The performance easily beat the 25 cents-per-share estimate of analysts surveyed by Thomson Reuters. These estimates typically remove one-time items.
Sales for the period ended Jan. 3 improved to $462.9 million from $428.2 million, which surpassed analysts' prediction of $437.5 million.
Domestic sales at stores open at least a year grew 1.4 percent on higher traffic, while overseas — which comprises nearly half of global retail sales — climbed 3.9 percent.
This sales figure is a key measure of a retailer's performance since it measures results at existing stores rather than newly opened ones.
Full-year profit surged 48 percent to $79.7 million, or $1.38 per share, from $54 million, or 93 cents per share, in the prior year.
Adjusted earnings were 87 cents per share.
Annual revenue fell 2 percent to $1.4 billion from $1.43 billion.
Domino's does not give quarterly or full-year profit outlooks, but did provide some long-term same-store sales forecasts. The pizza chain predicts domestic sales at stores open at least a year will rise 1 percent to 3 percent, with international sales at stores open at least a year up 3 percent to 5 percent.
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