Domino's Pizza net falls 64% in year

by Eric Schroeder
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ANN ARBOR, MICH. — Higher interest expense coupled with a decline in domestic supply chain margins crimped fiscal 2007 profit at Domino’s Pizza, Inc. Net income in the year ended Dec. 30 totaled $37,882,000, equal to 59c per share on the common stock, down 64% from $106,227,000, or $1.65 per share, in fiscal 2006. Net sales were $1,462,870,000, up 2% from $1,437,319,000 in the same period a year ago.

For the fourth quarter, net income slid 48% to $16,176,000, or 26c per share, down from $31,045,000, or 49c per share. Net sales totaled $445,941,000, up 2% from $435,255,000.

"The combination of unprecedented cost inflation and cautious consumer spending continues to create significant challenges for us in our domestic market," said David A. Brandon, chairman and chief executive officer. "However, instead of worrying about external factors we cannot control, we continue to stay focused on those factors we can control. There isn’t a challenge we face that won’t be cured when we regain positive traffic growth in our domestic business. We are obsessively focused on improving our store operations, including our service levels, product consistency and brand image. And, we continue to adjust our marketing strategies in an effort to jumpstart traffic throughout our domestic system of stores.

"Our international markets continue to grow as a percentage of Domino’s overall sales and profits and has established a strong track record for reliable, vibrant growth. As our international business marks its 25th anniversary in 2008, I want to acknowledge the tremendous job our master franchisees have done over the years and highlight the important role this division will play in the future growth of our company."

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