ANN ARBOR Mich. Citing a “challenging domestic environment” and higher interest expenses from the company’s larger debt levels, Domino’s Pizza Inc. posted on Tuesday a 55.2-percent dive in its third-quarter net income as well as a 1.6-percent drop in domestic systemwide same-store sales.
The same-store sales result, which reflected a 2-percent drop at U.S. franchised locations and a 0.8-percent uptick at U.S. corporate units, was yet another negative outcome after the pizza delivery giant had snapped a string of five quarters of negative results with its 2.1-percent gain in the second quarter of this year.
The news of a sales slowdown led many analysts to predict that a turnaround at Domino’s, which has struggled this year against both slower sales and higher costs, won’t be seen until next year. Most recently Domino’s has hired a new advertising agency and shifted its corporate executives to focus on the slumping domestic market.
“Unprecedented cost pressures and a weak consumer environment negatively impacted our domestic results in the quarter,” David Brandon, chairman and chief executive, said in a statement, “which made striking the right balance between increasing prices, while operating in a period of declining traffic, very difficult.”
At international locations, Domino’s reported that same-store sales jumped 8.3 percent, the highest result in nearly three years, the company reported, as well as the 55th consecutive quarter of international same-store sales growth.
For the quarter ended Sept. 9, Domino’s net income dropped to $11 million, or 11 cents per share, from a year-ago profit of $24.5 million, or 39 cents per share. The increase in interest expense under the company’s new debt facility reduced the latest quarter’s per-share earnings by 13 cents, the company reported.
Total revenue rose 3.3 percent to $337.3 million.