Domino's Pizza, Inc. (NYSE:DPZ) Q2 2019 Earnings Conference Call Transcript

Jul 16, 2019 • 10:00 am ET


Domino's Pizza, Inc. (NYSE:DPZ) Q2 2019 Earnings Conference Call Transcript


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Good day, ladies and gentlemen, and welcome to the Second Quarter 2019 Domino's Pizza Incorporated's Earnings Conference call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will be given at that time. (Operator Instructions). As a reminder, this conference is being recorded.

I would now like to turn the conference over to Tim McIntyre, Executive Vice President of Communications. You may begin.

Timothy P. McIntyre

Thank you, Sonia, and hello everyone. Thank you for joining us for our conversation today regarding the results of our second quarter of 2019. The call will feature commentary from Chief Executive Officer, Rich Allison; and Chief Financial Officer, Jeff Lawrence. As this call is primarily for our investor audience, I ask all members of the media and others to be in a listen-only mode. In the event that any forward-looking statements are made, I refer you to the safe harbor statement you can find in this morning's release, the 8-K and the 10-Q. In addition, please refer to the 8-K to find disclosures and reconciliations of non-GAAP financial measures that may be used on today's call.

A request to our analysts, we do -- we want to do our best to accommodate all of you today. So we encourage you to ask only one question on this call if you would please. And with that, I'd like to turn it over to Chief Financial Officer, Jeff Lawrence.

Jeffrey D. Lawrence

Thank you Tim, and good morning, everyone. In the second quarter, our positive global brand momentum continued as we delivered solid results for our shareholders. We continue to lead the broader restaurant industry with 33 straight quarters of positive US comparable sales and 102 consecutive quarters of positive international comps. We also continued to increase our global store count at a healthy pace, as we opened 200 net new stores in Q2. Our diluted EPS was $2.19, an increase of 19% over diluted EPS as adjusted in the prior-year quarter, which excluded the impact of our recapitalization transaction completed in 2018.

With that, let's take a closer look at the financial results for Q2. Global retail sales grew 5.1% as compared to the prior-year quarter, pressured by a stronger dollar. When excluding the negative impact of FX, global retail sales grew by 8.4%. This global retail sales growth was driven by both increases in same store sales and the average number of stores opened during the quarter. Same store sales for the US grew 3%, lapping a prior year increase of 6.9%. And same store sales for our international division grew 2.4%, rolling over a prior year increase of 4%.

Breaking down the US comp, our franchise business was up 3.1%, while our company owned stores were up 2.1%. The comp this quarter was driven by ticket growth. We continue to experience pressure on the US comp from our successful fortressing strategy as well as from aggressive marketing of third-party aggregators. On the international front, our comp for the quarter