Domino's Pizza, Inc. (NYSE:DPZ) Q1 2018 Earnings Conference Call - Preliminary Transcript

Apr 26, 2018 • 10:00 am ET


Domino's Pizza, Inc. (NYSE:DPZ) Q1 2018 Earnings Conference Call - Preliminary Transcript


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Good morning. My name is Marcella and I will be your conference operator today. At this time, I'd like to welcome everyone to the Q1 2018 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session.

Thank you. Mr. Tim McIntyre, you may begin your conference.

Timothy P. McIntyre

Thank you, Marcella, and hello, everyone. Thank you for joining the call today about the results of our first quarter. Today's call will be the final one featuring CEO, Patrick Doyle. As you know, this call is primarily for our investor audience, so I kindly ask that all members of the media and others to be in a listen-only mode. In the unlikely event that any forward-looking statements are made, I refer you to the safe harbor statement you can find in this morning's release and the 8-K.

As always, we will start with prepared comments from Domino's Chief Financial Officer, Jeff Lawrence, and from Chief Executive Officer, Patrick Doyle, followed by the analyst questions.

With that, I'd like to turn it over to CFO, Jeffrey Lawrence.

Jeffrey D. Lawrence

Thank you, Tim, and good morning, everyone. In the first quarter, our positive global brand momentum continued as we once again delivered great results for our shareholders. We continued to lead the broader restaurant industry with 28 consecutive quarters of positive U.S. comparable sales and 97 consecutive quarters of positive international comps. We also continued to increase our store count at a healthy pace. Our diluted earnings per share was $2 a share, which is an increase of 59% over the prior-year quarter.

With that, let's take a closer look at the financial results for Q1. Global retail sales, which are the total retail sales at franchise and company-owned stores worldwide, grew 16.8% in the quarter. When excluding the favorable impact of foreign currency, global retail sales grew by 13.1%. This global retail sales growth was driven by an increase in same-store sales growth and the average number of stores opened during the quarter. Same-store sales for our domestic division grew 8.3%, lapping a prior-year increase of 10.2%. Same-store sales for our international division grew 5%, lapping a prior-year increase of 4.3%.

Breaking down the domestic comp, our U.S. franchise business was up 8.4%, while our company-owned stores were up 6.4%. Both comp increases were driven primarily by order count or traffic growth as consumers continued to respond positively to the overall brand experience we offer them. Ticket also increased during the growth.

On the international front, all four of our geographic regions were again positive in the quarter with our Americas and Asia-Pacific regions leading the way. As I mentioned on the Q4 2017 call, our comps that quarter were negatively impacted when compared to the prior year, as our fiscal calendar did not include New Year's Day. That shifted back favorably in Q1 as comps globally were positively impacted by approximately half a point this quarter.

On the unit count front, we