ANN ARBOR, Mich. -- Domino's Pizza said strong carryout sales helped it achieve better-than-expected results in the fourth quarter despite increasing competition from food delivery companies like DoorDash.
The Ann Arbor, Michigan-based company — which has 17,000 stores worldwide — said Thursday that its fourth-quarter earnings rose 16% to $129.3 million. Adjusted for one-time items, the company earned $3.13 per share, beating Wall Street's forecast of $2.98 per share, according to analysts polled by FactSet.
Domino's shares zoomed up 23% to $365.71 in morning trading Thursday.
CEO Ritch Allison said the impact of the viral outbreak in China will likely be muted. Fewer than 20 of Domino's 274 stores in the country are temporarily closed, Allison said. Store openings in China will likely slow down, but that will also be temporary, he said. Domino's opened 80 net new stores in China last year.
"I don't see this being a long-term impact on the business,'' he said.
Domino's U.S. same-store sales — or sales at locations open at least a year — rose 3.4% for the quarter, which also beat analysts' forecast for 2.4% growth. Growth in carryout sales outpaced delivery sales, the company said. Still, it was the fifth consecutive quarter that Domino's same-store sales increases were lower than the prior year. It reported 6.7% same-store sales growth in the fourth quarter of 2018.
Domino's reaffirmed its goal of 2% to 5% same-store sales growth over the next two to three years. Domino's CEO Ritch Allison said aggressive discounting between third-party delivery companies like GrubHub and UberEats makes it difficult to predict sales growth more precisely.
“They're standing in a circular firing squad right now," Allison said on a conference call with investors.
Domino's is rapidly building new stores to crowd out competitors like Papa John's and ensure quick delivery times. During the fourth quarter, Domino's opened 492 net new stores worldwide; it opened 1,106 net new stores in 2019. But some investors have been concerned that those stores are stealing share from other Domino's locations.
Domino's said revenue rose 6% to $1.15 billion for the quarter, also beating analysts' forecast of $1.12 billion.