July 21, 2016 / 11:42 AM / 3 years ago

Domino's shares hit record high after sales and profit beat

(Reuters) - Domino’s Pizza Inc’s (DPZ.N) shares hit a record high after the company reported better-than-expected quarterly sales and profit, helped by store openings and a jump in revenue from the services and products it provides to franchisees.

People pass by a Domino's Pizza restaurant in New York City, U.S., May 25, 2016. REUTERS/Brendan McDermid

The company’s shares, which have been on a tear, rose as much as 6.3 percent to a record high of $145.52 in morning trading on Thursday.

Most of Domino’s outlets are operated by franchisees, who pay the company for such things as dough and ovens.

The Ann Arbor, Michigan-based company said a net 215 Domino’s outlets were opened outside the United States in the three months ended June 19, all of them franchised. A net 28 outlets were opened in the United States, none company-owned.

Domino’s had 12,692 stores globally as of March 27, out of which 7,691 were franchises outside the United States.

Same-store sales at company-owned outlets in the United States - Domino’s biggest source of store revenue - rose 9.1 percent, outpacing the 5.7 percent average forecast of analysts polled by research firm Consensus Metrix.

Total international sales jumped 12.4 percent in the quarter, while total U.S. sales rose 12 percent. Sales at international outlets open for at least a year rose 7.1 percent.

Domino’s has been outperforming rivals in the United States, helped by investments to take advantage of technologies such as smart watches, digital wallets and apps that make it easy for customers to place and pay for orders.

Yum Brands Inc’s (YUM.N) Pizza Hut, one of Domino’s biggest rivals, reported flat same-store sales in the latest quarter.

Revenue from Domino’s supply chain business, through which it supplies franchisees, rose 12 percent in the quarter.

The business contributed more than 60 percent of the company’s total revenue.

Domino’s net income rose to $49.3 million, or 98 cents per share, in the quarter, from $45.9 million, or 81 cents per share, a year earlier.

Analysts on average had expected earnings of 94 cents per share, according to Thomson Reuters I/B/E/S.

Total sales rose 12 percent to $547.3 million, beating the average analysts’ estimate of $533.4 million.

Up to Wednesday’s close, Domino’s stock had risen by nearly a quarter this year.

Reporting by Subrat Patnaik and Abhijith Ganapavaram in Bengaluru; Editing by Ted Kerr

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