In the third quarter, Domino’s Pizza (DPZ) posted revenue of $786.0 million, a rise of 22.1% from the $643.6 million it reported in the third quarter of 2017.
However, the company’s revenue fell short of analysts’ expectation of $788.1 million due to lower-than-expected SSSG (same-store sales growth).
Domino’s year-over-year revenue growth was primarily driven by its adoption of a new accounting standard, which contributed $82.5 million, and its higher supply chain revenue. Increased revenue from its company-owned restaurants and franchised restaurants also contributed to its revenue growth during the quarter. Let’s look at Domino’s revenue growth across its segments.
Domestic company-owned restaurants
The company’s domestic company-owned restaurants posted revenue of $118.5 million, a rise of 5.0% from $112.9 million in the third quarter of 2017. This revenue growth was driven by positive SSSG of 5.0% partially offset by a decline in the unit count due to refranchising. The company operated 386 company-owned restaurants during the quarter compared to 399 in the corresponding quarter of the previous year.
Domestic franchised restaurants
During the quarter, the company’s domestic franchised restaurant revenue rose 11.4% to $89.4 million. This revenue growth was driven by an increase in royalties and franchise fees due to positive SSSG of 6.4% and the net addition of 273 franchised restaurants in the last four quarters.
During the quarter, the revenue from the company’s supply chain segment rose 10.7% to $45.1 million. This revenue growth was driven by higher supply chain volumes due to the addition of new restaurants and positive SSSG.
International franchised restaurants
The international franchised segment posted revenue of $50.4 million, a rise of 4.3% from $48.4 million in the corresponding quarter of the previous year. The segment’s revenue growth was driven by an increase in royalties and franchise fees due to positive SSSG of 3.3% and the net addition of 660 franchised restaurants in the last four quarters.
Peer comparison and outlook
For the next four quarters, analysts expect Domino’s Pizza to post revenue of $3.69 billion, which represents a rise of 13.9% from its revenue of $3.24 billion in the corresponding four quarters of the previous year. Next, we’ll look at Domino’s Pizza’s third-quarter SSSG.