Domino's Pizza, Inc. (NYSE:DPZ) Q3 2019 Earnings Conference Call - Final Transcript

Oct 08, 2019 • 10:00 am ET


Domino's Pizza, Inc. (NYSE:DPZ) Q3 2019 Earnings Conference Call - Final Transcript


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Ladies and gentlemen, thank you for standing by and welcome to the Third Quarter 2019 Domino's Pizza, Inc. Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session.

[Operator Instructions]

Please be advised that today's conference is being recorded.

[Operator Instructions]

I would now like to hand the conference over to your speaker today, Tim McIntyre, Communications and Investor Relations. Please go ahead, sir.

Timothy P. McIntyre

Thanks, Sonya and hello, everyone. Thank you for joining us for our conversation today regarding the results of our third quarter 2019. The call will feature commentary from Chief Executive Officer, Ritch 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 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 want to do our best to accommodate all of you today so we encourage you to ask only one one-part question on this call, if you would please.

With that, I'd like to turn the call over to Chief Financial Officer, Jeff Lawrence.

Jeffrey D. Lawrence

Thanks, Tim, and good morning, everyone. In the third quarter, our positive global brand momentum continued as we delivered solid results for our shareholders. We continue to lead the broader restaurant industry with 34 straight quarters of positive US comparable sales and 103 consecutive quarters of positive international comps. We also continue to increase our global store count at a healthy pace, as we opened 214 net new stores in Q3.

Our diluted EPS was $2.05, an increase of 5.1% over the prior-year quarter, primarily resulting from strong operational results, offset in part by a higher tax rate. With that, let's take a closer look at the financial results for Q3.

Global retail sales grew 5.8% as compared to the prior year quarter, pressured by a stronger dollar. When excluding the negative impact of foreign currency, global retail sales grew by 7.5%. This global retail sales growth was driven by both an increase in the average number of stores opened during the quarter and the higher same-store sales.

Same-store sales for the US grew 2.4%, lapping a prior year increase of 6.3%. And same-store sales for our international division grew 1.7%, rolling over a prior year increase of 3.3%. Breaking down the US comp, our franchise business was up 2.5%, while our Company-owned stores were up 1.7%. The comp this quarter was driven entirely by ticket growth.

While we continue to grow our overall delivery business, we continue to experience pressure on the delivery business comp from our successful fortressing strategy as well as from aggressive competitive activity. Our carryout business