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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 8, 2024

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 001-32242

Domino’s Pizza, Inc.

(Exact Name of Registrant as Specified in Its Charter)

Delaware

38-2511577

(State or Other Jurisdiction of

Incorporation or Organization)

(I.R.S. Employer

Identification No.)

30 Frank Lloyd Wright Drive

Ann Arbor, Michigan

48105

(Address of Principal Executive Offices)

(Zip Code)

(734) 930-3030

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Exchange Act:

Title of Each Class

Trading Symbol

Name of Each Exchange on Which Registered

Domino’s Pizza, Inc. Common Stock, $0.01 par value

DPZ

New York Stock Exchange

Indicate by check mark whether registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

 

☐

 

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of October 3, 2024, Domino’s Pizza, Inc. had 34,531,978 shares of common stock, par value $0.01 per share, outstanding.

 

 

Domino’s Pizza, Inc.

TABLE OF CONTENTS

Page No.

PART I.

FINANCIAL INFORMATION

 

 

 

Item 1.

Financial Statements

3

 

 

 

Condensed Consolidated Balance Sheets (Unaudited) – As of September 8, 2024 and December 31, 2023

3

 

 

 

Condensed Consolidated Statements of Income (Unaudited) – Fiscal quarters and three fiscal quarters ended September 8, 2024 and September 10, 2023

4

 

 

 

Condensed Consolidated Statements of Comprehensive Income (Unaudited) – Fiscal quarters and three fiscal quarters ended September 8, 2024 and September 10, 2023

5

 

 

 

Condensed Consolidated Statements of Cash Flows (Unaudited) – Three fiscal quarters ended September 8, 2024 and September 10, 2023

6

 

 

 

Notes to Condensed Consolidated Financial Statements (Unaudited)

7

 

 

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

14

 

 

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

26

 

 

 

Item 4.

Controls and Procedures

26

 

 

 

PART II.

OTHER INFORMATION

 

 

 

 

Item 1.

Legal Proceedings

27

 

 

 

Item 1A.

Risk Factors

27

 

 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

27

 

 

 

Item 3.

Defaults Upon Senior Securities

27

 

 

 

Item 4.

Mine Safety Disclosures

27

 

 

 

Item 5.

Other Information

28

 

 

 

Item 6.

Exhibits

29

 

 

SIGNATURES

30

 

2

 

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

Domino’s Pizza, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(Unaudited)

 

(In thousands)

 

September 8, 2024

 

 

December 31, 2023 (1)

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

189,084

 

 

$

114,098

 

Restricted cash and cash equivalents

 

 

185,439

 

 

 

200,870

 

Accounts receivable, net

 

 

278,707

 

 

 

282,809

 

Inventories

 

 

69,168

 

 

 

82,964

 

Prepaid expenses and other

 

 

38,725

 

 

 

30,215

 

Advertising fund assets, restricted

 

 

111,134

 

 

 

106,335

 

Total current assets

 

 

872,257

 

 

 

817,291

 

Property, plant and equipment:

 

 

 

 

 

 

Land and buildings

 

 

105,018

 

 

 

108,791

 

Leasehold and other improvements

 

 

185,915

 

 

 

176,817

 

Equipment

 

 

389,488

 

 

 

364,620

 

Construction in progress

 

 

13,588

 

 

 

24,505

 

 

 

694,009

 

 

 

674,733

 

Accumulated depreciation and amortization

 

 

(400,602

)

 

 

(370,368

)

Property, plant and equipment, net

 

 

293,407

 

 

 

304,365

 

Other assets:

 

 

 

 

 

 

Operating lease right-of-use assets

 

 

215,040

 

 

 

207,323

 

Goodwill

 

 

11,578

 

 

 

11,688

 

Capitalized software, net

 

 

151,947

 

 

 

134,105

 

Investment in DPC Dash

 

 

162,424

 

 

 

143,553

 

Deferred income tax assets, net

 

 

21,216

 

 

 

13,680

 

Other assets

 

 

47,197

 

 

 

42,894

 

Total other assets

 

 

609,402

 

 

 

553,243

 

Total assets

 

$

1,775,066

 

 

$

1,674,899

 

Liabilities and stockholders’ deficit

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Current portion of long-term debt

 

$

4,946

 

 

$

56,366

 

Accounts payable

 

 

97,847

 

 

 

106,267

 

Operating lease liabilities

 

 

40,806

 

 

 

39,330

 

Insurance reserves

 

 

27,137

 

 

 

28,135

 

Dividends payable

 

 

54,063

 

 

 

1,514

 

Advertising fund liabilities

 

 

109,219

 

 

 

104,246

 

Other accrued liabilities

 

 

176,490

 

 

 

211,492

 

Total current liabilities

 

 

510,508

 

 

 

547,350

 

Long-term liabilities:

 

 

 

 

 

 

Long-term debt, less current portion

 

 

4,970,687

 

 

 

4,934,062

 

Operating lease liabilities

 

 

186,981

 

 

 

179,548

 

Insurance reserves

 

 

37,212

 

 

 

38,559

 

Other accrued liabilities

 

 

46,316

 

 

 

45,747

 

Total long-term liabilities

 

 

5,241,196

 

 

 

5,197,916

 

Stockholders’ deficit:

 

 

 

 

 

 

Common stock

 

 

345

 

 

 

347

 

Additional paid-in capital

 

 

1,710

 

 

 

2,801

 

Retained deficit

 

 

(3,973,816

)

 

 

(4,069,648

)

Accumulated other comprehensive loss

 

 

(4,877

)

 

 

(3,867

)

Total stockholders’ deficit

 

 

(3,976,638

)

 

 

(4,070,367

)

Total liabilities and stockholders’ deficit

 

$

1,775,066

 

 

$

1,674,899

 

 

(1) The condensed consolidated balance sheet at December 31, 2023 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements.

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

3

 

Domino’s Pizza, Inc. and Subsidiaries

Condensed Consolidated Statements of Income

(Unaudited)

 

 

 

Fiscal Quarter Ended

 

 

Three Fiscal Quarters Ended

 

 

 

September 8,

 

 

September 10,

 

 

September 8,

 

 

September 10,

 

(In thousands, except per share data)

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Company-owned stores

 

$

89,173

 

 

$

86,277

 

 

$

274,086

 

 

$

258,882

 

U.S. franchise royalties and fees

 

 

144,074

 

 

 

138,322

 

 

 

442,168

 

 

 

410,454

 

Supply chain

 

 

651,314

 

 

 

618,086

 

 

 

1,969,772

 

 

 

1,858,023

 

International franchise royalties and fees

 

 

74,633

 

 

 

73,142

 

 

 

220,295

 

 

 

213,308

 

U.S. franchise advertising

 

 

120,925

 

 

 

111,534

 

 

 

356,181

 

 

 

335,719

 

Total revenues

 

 

1,080,119

 

 

 

1,027,361

 

 

 

3,262,502

 

 

 

3,076,386

 

Cost of sales:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Company-owned stores

 

 

74,205

 

 

 

72,614

 

 

 

226,722

 

 

 

214,609

 

Supply chain

 

 

582,167

 

 

 

556,578

 

 

 

1,753,132

 

 

 

1,673,405

 

Total cost of sales

 

 

656,372

 

 

 

629,192

 

 

 

1,979,854

 

 

 

1,888,014

 

Gross margin

 

 

423,747

 

 

 

398,169

 

 

 

1,282,648

 

 

 

1,188,372

 

General and administrative

 

 

103,991

 

 

 

97,203

 

 

 

320,962

 

 

 

290,186

 

U.S. franchise advertising

 

 

120,925

 

 

 

111,534

 

 

 

356,181

 

 

 

335,719

 

Refranchising loss

 

 

—

 

 

 

—

 

 

 

158

 

 

 

149

 

Income from operations

 

 

198,831

 

 

 

189,432

 

 

 

605,347

 

 

 

562,318

 

Other income

 

 

26,172

 

 

 

28,231

 

 

 

18,871

 

 

 

13,267

 

Interest income

 

 

4,339

 

 

 

2,707

 

 

 

12,297

 

 

 

7,635

 

Interest expense

 

 

(44,726

)

 

 

(44,796

)

 

 

(135,293

)

 

 

(136,275

)

Income before provision for income taxes

 

 

184,616

 

 

 

175,574

 

 

 

501,222

 

 

 

446,945

 

Provision for income taxes

 

 

37,692

 

 

 

27,898

 

 

 

86,496

 

 

 

85,119

 

Net income

 

$

146,924

 

 

$

147,676

 

 

$

414,726

 

 

$

361,826

 

Earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

Common stock - basic

 

$

4.22

 

 

$

4.22

 

 

$

11.91

 

 

$

10.28

 

Common stock - diluted

 

$

4.19

 

 

$

4.18

 

 

$

11.80

 

 

$

10.19

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

4

 

Domino’s Pizza, Inc. and Subsidiaries

Condensed Consolidated Statements of Comprehensive Income

(Unaudited)

 

 

 

Fiscal Quarter Ended

 

 

Three Fiscal Quarters Ended

 

 

 

September 8,

 

 

September 10,

 

 

September 8,

 

 

September 10,

 

(In thousands)

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Net income

 

$

146,924

 

 

$

147,676

 

 

$

414,726

 

 

$

361,826

 

Currency translation adjustment

 

 

598

 

 

 

(1,330

)

 

 

(1,010

)

 

 

(403

)

Comprehensive income

 

$

147,522

 

 

$

146,346

 

 

$

413,716

 

 

$

361,423

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

5

 

Domino’s Pizza, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Unaudited)

 

 

 

Three Fiscal Quarters Ended

 

 

 

September 8,

 

 

September 10,

 

(In thousands)

 

2024

 

 

2023

 

Cash flows from operating activities:

 

 

 

 

 

 

Net income

 

$

414,726

 

 

$

361,826

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

60,974

 

 

 

54,999

 

Refranchising loss

 

 

158

 

 

 

149

 

Loss on sale/disposal of assets

 

 

501

 

 

 

547

 

Amortization of debt issuance costs

 

 

3,685

 

 

 

3,858

 

Benefit for deferred income taxes

 

 

(7,524

)

 

 

(12,191

)

Non-cash equity-based compensation expense

 

 

31,541

 

 

 

26,507

 

Excess tax benefits from equity-based compensation

 

 

(21,609

)

 

 

(2,973

)

Provision for losses on accounts and notes receivable

 

 

250

 

 

 

1,342

 

Unrealized gain on investments

 

 

(18,871

)

 

 

(13,267

)

Changes in operating assets and liabilities

 

 

(18,968

)

 

 

7,682

 

Changes in advertising fund assets and liabilities, restricted

 

 

2,016

 

 

 

(6,349

)

Net cash provided by operating activities

 

 

446,879

 

 

 

422,130

 

Cash flows from investing activities:

 

 

 

 

 

 

Capital expenditures

 

 

(70,801

)

 

 

(59,271

)

Other

 

 

(1,094

)

 

 

(743

)

Net cash used in investing activities

 

 

(71,895

)

 

 

(60,014

)

Cash flows from financing activities:

 

 

 

 

 

 

Repayments of long-term debt and finance lease obligations

 

 

(15,947

)

 

 

(41,349

)

Proceeds from exercise of stock options

 

 

34,669

 

 

 

5,806

 

Purchases of common stock

 

 

(214,999

)

 

 

(210,847

)

Tax payments for restricted stock upon vesting

 

 

(10,706

)

 

 

(5,240

)

Payments of common stock dividends and equivalents

 

 

(106,015

)

 

 

(85,564

)

Net cash used in financing activities

 

 

(312,998

)

 

 

(337,194

)

Effect of exchange rate changes on cash

 

 

(589

)

 

 

(304

)

Change in cash and cash equivalents, restricted cash and cash equivalents

 

 

61,397

 

 

 

24,618

 

 

 

 

 

 

 

Cash and cash equivalents, beginning of period

 

 

114,098

 

 

 

60,356

 

Restricted cash and cash equivalents, beginning of period

 

 

200,870

 

 

 

191,289

 

Cash and cash equivalents included in advertising fund assets, restricted,
   beginning of period

 

 

88,165

 

 

 

143,559

 

Cash and cash equivalents, restricted cash and cash equivalents and cash and
   cash equivalents included in advertising fund assets, restricted, beginning of period

 

 

403,133

 

 

 

395,204

 

 

 

 

 

 

 

Cash and cash equivalents, end of period

 

 

189,084

 

 

 

80,879

 

Restricted cash and cash equivalents, end of period

 

 

185,439

 

 

 

202,307

 

Cash and cash equivalents included in advertising fund assets, restricted,
   end of period

 

 

90,007

 

 

 

136,636

 

Cash and cash equivalents, restricted cash and cash equivalents and cash and
   cash equivalents included in advertising fund assets, restricted, end of period

 

$

464,530

 

 

$

419,822

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

6

 

Domino’s Pizza, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(Unaudited; tabular amounts in thousands, except share and per share amounts)

September 8, 2024

 

 

1. Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. For further information, refer to the consolidated financial statements and footnotes for the fiscal year ended December 31, 2023 included in the Company’s 2023 Annual Report on Form 10-K, filed with the Securities and Exchange Commission on February 26, 2024 (the “2023 Form 10-K”).

In the opinion of management, all adjustments, consisting of normal recurring items, considered necessary for a fair statement have been included. Operating results for the fiscal quarter and three fiscal quarters ended September 8, 2024 are not necessarily indicative of the results that may be expected for the fiscal year ending December 29, 2024.

 

2. Segment Information

 

The tables below summarize the financial information concerning the Company’s reportable segments for the third quarter and three fiscal quarters of 2024 and the third quarter and three fiscal quarters of 2023. Intersegment revenues are comprised of sales of food, equipment and supplies from the supply chain segment to the Company-owned stores in the U.S. stores segment. Intersegment sales prices are market based. The “Other” column as it relates to Segment Income below primarily includes corporate administrative costs that are not allocable to a reportable segment, including labor, computer expenses, professional fees, travel and entertainment, rent, insurance and other corporate administrative costs.

 

 

 

Fiscal Quarters Ended September 8, 2024 and September 10, 2023

 

 

 

U.S.

 

 

Supply

 

 

International

 

 

Intersegment

 

 

 

 

 

 

 

 

 

Stores

 

 

Chain

 

 

Franchise

 

 

Revenues

 

 

Other

 

 

Total

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2024

 

$

354,172

 

 

$

679,664

 

 

$

74,633

 

 

$

(28,350

)

 

$

—

 

 

$

1,080,119

 

2023

 

 

336,133

 

 

 

643,728

 

 

 

73,142

 

 

 

(25,642

)

 

 

—

 

 

 

1,027,361

 

Segment Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2024

 

$

128,577

 

 

$

61,173

 

 

$

62,367

 

 

N/A

 

 

$

(22,839

)

 

$

229,278

 

2023

 

 

120,351

 

 

 

55,250

 

 

 

61,495

 

 

N/A

 

 

 

(19,809

)

 

 

217,287

 

 

 

 

Three Fiscal Quarters Ended September 8, 2024 and September 10, 2023

 

 

 

U.S.

 

 

Supply

 

 

International

 

 

Intersegment

 

 

 

 

 

 

 

 

 

Stores

 

 

Chain

 

 

Franchise

 

 

Revenues

 

 

Other

 

 

Total

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2024

 

$

1,072,435

 

 

$

2,053,055

 

 

$

220,295

 

 

$

(83,283

)

 

$

—

 

 

$

3,262,502

 

2023

 

 

1,005,055

 

 

 

1,935,332

 

 

 

213,308

 

 

 

(77,309

)

 

 

—

 

 

 

3,076,386

 

Segment Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2024

 

$

394,167

 

 

$

190,736

 

 

$

180,796

 

 

N/A

 

 

$

(67,178

)

 

$

698,521

 

2023

 

 

356,626

 

 

 

163,791

 

 

 

178,499

 

 

N/A

 

 

 

(54,396

)

 

 

644,520

 

 

The following table reconciles total Segment Income to consolidated income before provision for income taxes.

 

 

 

Fiscal Quarter Ended

 

 

Three Fiscal Quarters Ended

 

 

 

September 8,

 

 

September 10,

 

 

September 8,

 

 

September 10,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Total Segment Income

 

$

229,278

 

 

$

217,287

 

 

$

698,521

 

 

$

644,520

 

Depreciation and amortization

 

 

(20,756

)

 

 

(18,268

)

 

 

(60,974

)

 

 

(54,999

)

Refranchising loss

 

 

—

 

 

 

—

 

 

 

(158

)

 

 

(149

)

Loss on sale/disposal of assets

 

 

(174

)

 

 

(145

)

 

 

(501

)

 

 

(547

)

Non-cash equity-based compensation expense

 

 

(9,517

)

 

 

(9,442

)

 

 

(31,541

)

 

 

(26,507

)

Income from operations

 

 

198,831

 

 

 

189,432

 

 

 

605,347

 

 

 

562,318

 

Other income

 

 

26,172

 

 

 

28,231

 

 

 

18,871

 

 

 

13,267

 

Interest income

 

 

4,339

 

 

 

2,707

 

 

 

12,297

 

 

 

7,635

 

Interest expense

 

 

(44,726

)

 

 

(44,796

)

 

 

(135,293

)

 

 

(136,275

)

Income before provision for income taxes

 

$

184,616

 

 

$

175,574

 

 

$

501,222

 

 

$

446,945

 

 

7

 

3. Earnings Per Share

 

 

 

Fiscal Quarter Ended

 

 

Three Fiscal Quarters Ended

 

 

 

September 8,

 

 

September 10,

 

 

September 8,

 

 

September 10,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Net income available to common stockholders - basic and diluted

 

$

146,924

 

 

$

147,676

 

 

$

414,726

 

 

$

361,826

 

Basic weighted average number of shares

 

 

34,801,086

 

 

 

35,030,660

 

 

 

34,835,394

 

 

 

35,207,117

 

Earnings per share – basic

 

$

4.22

 

 

$

4.22

 

 

$

11.91

 

 

$

10.28

 

Diluted weighted average number of shares

 

 

35,039,408

 

 

 

35,357,043

 

 

 

35,145,732

 

 

 

35,516,434

 

Earnings per share – diluted

 

$

4.19

 

 

$

4.18

 

 

$

11.80

 

 

$

10.19

 

 

The denominators used in calculating diluted earnings per share for common stock for the fiscal quarters and three fiscal quarters each ended September 8, 2024 and September 10, 2023 do not include the following because the effect of including these shares would be anti-dilutive or because the performance targets for these awards had not yet been met:

 

 

 

Fiscal Quarter Ended

 

 

Three Fiscal Quarters Ended

 

 

 

September 8,

 

 

September 10,

 

 

September 8,

 

 

September 10,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Anti-dilutive shares underlying stock-based awards

 

 

 

 

 

 

 

 

 

 

 

 

   Stock options

 

 

44,342

 

 

 

207,218

 

 

 

46,290

 

 

 

228,747

 

   Restricted stock awards and units

 

 

4,223

 

 

 

526

 

 

 

4,223

 

 

 

27,615

 

Performance condition not met

 

 

 

 

 

 

 

 

 

 

 

 

   Restricted stock awards and units

 

 

49,742

 

 

 

59,622

 

 

 

49,742

 

 

 

59,622

 

 

4. Stockholders’ Deficit

The following table summarizes the changes in stockholders’ deficit for the third quarter of 2024.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

Other

 

 

 

Common Stock

 

 

Paid-in

 

 

Retained

 

 

Comprehensive

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Loss

 

Balance at June 16, 2024

 

 

34,956,623

 

 

$

350

 

 

$

30,008

 

 

$

(3,916,008

)

 

$

(5,475

)

Net income

 

 

—

 

 

 

—

 

 

 

—

 

 

 

146,924

 

 

 

—

 

Dividends declared on common stock and equivalents
($1.51 per share)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(52,502

)

 

 

—

 

Issuance and cancellation of stock awards, net

 

 

3,466

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Tax payments for restricted stock upon vesting

 

 

(3,029

)

 

 

(1

)

 

 

(1,445

)

 

 

—

 

 

 

—

 

Purchases of common stock

 

 

(443,302

)

 

 

(4

)

 

 

(39,572

)

 

 

(152,230

)

 

 

—

 

Exercise of stock options

 

 

16,612

 

 

 

—

 

 

 

3,202

 

 

 

—

 

 

 

—

 

Non-cash equity-based compensation expense

 

 

—

 

 

 

—

 

 

 

9,517

 

 

 

—

 

 

 

—

 

Currency translation adjustment

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

598

 

Balance at September 8, 2024

 

 

34,530,370

 

 

$

345

 

 

$

1,710

 

 

$

(3,973,816

)

 

$

(4,877

)

The following table summarizes the changes in stockholders’ deficit for the three fiscal quarters of 2024.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

Other

 

 

 

Common Stock

 

 

Paid-in

 

 

Retained

 

 

Comprehensive

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Loss

 

Balance at December 31, 2023

 

 

34,726,182

 

 

$

347

 

 

$

2,801

 

 

$

(4,069,648

)

 

$

(3,867

)

Net income

 

 

—

 

 

 

—

 

 

 

—

 

 

 

414,726

 

 

 

—

 

Dividends declared on common stock and equivalents
($4.53 per share)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(158,565

)

 

 

—

 

Issuance and cancellation of stock awards, net

 

 

65,135

 

 

 

1

 

 

 

—

 

 

 

—

 

 

 

—

 

Tax payments for restricted stock upon vesting

 

 

(23,417

)

 

 

(1

)

 

 

(10,705

)

 

 

—

 

 

 

—

 

Purchases of common stock

 

 

(499,674

)

 

 

(5

)

 

 

(56,593

)

 

 

(160,329

)

 

 

—

 

Exercise of stock options

 

 

262,144

 

 

 

3

 

 

 

34,666

 

 

 

—

 

 

 

—

 

Non-cash equity-based compensation expense

 

 

—

 

 

 

—

 

 

 

31,541

 

 

 

—

 

 

 

—

 

Currency translation adjustment

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(1,010

)

Balance at September 8, 2024

 

 

34,530,370

 

 

$

345

 

 

$

1,710

 

 

$

(3,973,816

)

 

$

(4,877

)

 

8

 

Subsequent to the end of the third quarter of 2024, on October 8, 2024, the Company’s Board of Directors declared a $1.51 per share quarterly dividend on its outstanding common stock for shareholders of record as of December 13, 2024 to be paid on December 27, 2024.

 

The following table summarizes the changes in stockholders’ deficit for the third quarter of 2023.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

Other

 

 

 

Common Stock

 

 

Paid-in

 

 

Retained

 

 

Comprehensive

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Loss

 

Balance at June 18, 2023

 

 

35,057,585

 

 

$

351

 

 

$

3,370

 

 

$

(4,166,520

)

 

$

(3,767

)

Net income

 

 

—

 

 

 

—

 

 

 

—

 

 

 

147,676

 

 

 

—

 

Dividends declared on common stock and equivalents
($1.21 per share)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(42,493

)

 

 

—

 

Issuance and cancellation of stock awards, net

 

 

4,142

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Tax payments for restricted stock upon vesting

 

 

(5,932

)

 

 

—

 

 

 

(2,172

)

 

 

—

 

 

 

—

 

Purchases of common stock

 

 

(229,860

)

 

 

(3

)

 

 

(14,435

)

 

 

(76,416

)

 

 

—

 

Exercise of stock options

 

 

53,188

 

 

 

1

 

 

 

4,754

 

 

 

—

 

 

 

—

 

Non-cash equity-based compensation expense

 

 

—

 

 

 

—

 

 

 

9,442

 

 

 

—

 

 

 

—

 

Currency translation adjustment

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(1,330

)

Balance at September 10, 2023

 

 

34,879,123

 

 

$

349

 

 

$

959

 

 

$

(4,137,753

)

 

$

(5,097

)

 

The following table summarizes the changes in stockholders’ deficit for the three fiscal quarters of 2023.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

Other

 

 

 

Common Stock

 

 

Paid-in

 

 

Retained

 

 

Comprehensive

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Loss

 

Balance at January 1, 2023

 

 

35,419,718

 

 

$

354

 

 

$

9,693

 

 

$

(4,194,418

)

 

$

(4,694

)

Net income

 

 

—

 

 

 

—

 

 

 

—

 

 

 

361,826

 

 

 

—

 

Dividends declared on common stock and equivalents
($3.63 per share)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(128,143

)

 

 

—

 

Issuance and cancellation of stock awards, net

 

 

32,715

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Tax payments for restricted stock upon vesting

 

 

(15,601

)

 

 

—

 

 

 

(5,240

)

 

 

—

 

 

 

—

 

Purchases of common stock

 

 

(622,405

)

 

 

(6

)

 

 

(35,806

)

 

 

(177,018

)

 

 

—

 

Exercise of stock options

 

 

64,696

 

 

 

1

 

 

 

5,805

 

 

 

—

 

 

 

—

 

Non-cash equity-based compensation expense

 

 

—

 

 

 

—

 

 

 

26,507

 

 

 

—

 

 

 

—

 

Currency translation adjustment

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(403

)

Balance at September 10, 2023

 

 

34,879,123

 

 

$

349

 

 

$

959

 

 

$

(4,137,753

)

 

$

(5,097

)

 

5. Leverage Ratio

In accordance with the Company’s debt agreements, the payment of principal on the outstanding senior notes may be suspended if the Holdco Leverage Ratio is less than or equal to 5.0x total debt to adjusted EBITDA, as defined in the related agreements, and no catch-up provisions are applicable. As of the end of the first, second and third quarters of 2024, the Company had a Holdco Leverage Ratio of less than 5.0x, and accordingly, did not make the previously scheduled debt amortization payments for its outstanding notes beginning in the second quarter of 2024. Accordingly, all principal amounts of the Company’s outstanding notes have been classified as long-term debt in the condensed consolidated balance sheet as of September 8, 2024.

9

 

6. Fair Value Measurements

Fair value measurements enable the reader of the financial statements to assess the inputs used to develop those measurements by establishing a hierarchy for ranking the quality and reliability of the information used to determine fair values. The Company classifies and discloses assets and liabilities carried at fair value in one of the following three categories:

Level 1: Quoted market prices in active markets for identical assets or liabilities.

Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data.

Level 3: Unobservable inputs that are not corroborated by market data.

 

Fair Value of Cash Equivalents and Marketable Securities

 

The fair values of the Company’s cash equivalents and investments in marketable securities are based on quoted prices in active markets for identical assets.

 

Fair Value of Investments

The Company holds a non-controlling interest in DPC Dash Ltd (“DPC Dash”), the Company’s master franchisee in China that owns and operates Domino’s Pizza stores in that market. The Company accounts for its investment in DPC Dash as a trading security and records it at fair value at the end of each reporting period, with gains and losses recorded in other income or expense in its condensed consolidated statements of income. As of September 8, 2024, the fair value of the Company’s investment in 18,101,019 DPC Dash ordinary shares is based on the active exchange quoted price for the equity security of HK$69.95 per share (HK: 1405).

The Company recorded a positive adjustment to the carrying amount of its investment in DPC Dash of $26.2 million and $18.9 million in the third quarter and three fiscal quarters of 2024, respectively. These amounts were recorded in other income in the Company’s condensed consolidated statements of income. The Company recorded a positive adjustment to the carrying amount of its investment in DPC Dash of $28.2 million and $13.3 million in the third quarter and three fiscal quarters of 2023, respectively.

The following tables summarize the carrying amounts and fair values of certain assets at September 8, 2024 and December 31, 2023:

 

 

 

At September 8, 2024

 

 

 

 

 

 

Fair Value Estimated Using

 

 

 

Carrying

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

 

Amount

 

 

Inputs

 

 

Inputs

 

 

Inputs

 

Cash equivalents

 

$

157,509

 

 

$

157,509

 

 

$

—

 

 

$

—

 

Restricted cash equivalents

 

 

121,461

 

 

 

121,461

 

 

 

—

 

 

 

—

 

Investments in marketable securities

 

 

19,941

 

 

 

19,941

 

 

 

—

 

 

 

—

 

Advertising fund cash equivalents, restricted

 

 

68,543

 

 

 

68,543

 

 

 

—

 

 

 

—

 

Investment in DPC Dash

 

 

162,424

 

 

 

162,424

 

 

 

—

 

 

 

—

 

 

 

 

At December 31, 2023

 

 

 

 

 

 

Fair Value Estimated Using

 

 

 

Carrying

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

 

Amount

 

 

Inputs

 

 

Inputs

 

 

Inputs

 

Cash equivalents

 

$

50,732

 

 

$

50,732

 

 

$

—

 

 

$

—

 

Restricted cash equivalents

 

 

133,063

 

 

 

133,063

 

 

 

—

 

 

 

—

 

Investments in marketable securities

 

 

16,720

 

 

 

16,720

 

 

 

—

 

 

 

—

 

Advertising fund cash equivalents, restricted

 

 

69,199

 

 

 

69,199

 

 

 

—

 

 

 

—

 

Investment in DPC Dash

 

 

143,553

 

 

 

143,553

 

 

 

—

 

 

 

—

 

 

10

 

Fair Value of Debt

 

The estimated fair values of the Company’s fixed rate notes are classified as Level 2 measurements, as the Company estimates the fair value amount by using available market information. The Company obtained quotes from two separate brokerage firms that are knowledgeable about the Company’s fixed rate notes and, at times, trade these notes. The Company also performed its own internal analysis based on the information gathered from public markets, including information on notes that are similar to those of the Company. However, considerable judgment is required to interpret market data to estimate fair value. Accordingly, the fair value estimates presented are not necessarily indicative of the amount that the Company or the noteholders could realize in a current market exchange. The use of different assumptions and/or estimation methodologies may have a material effect on the estimated fair values stated below.

 

Management estimated the approximate fair values of the Company’s 2015, 2017, 2018, 2019 and 2021 notes as follows:

 

 

September 8, 2024

 

 

December 31, 2023

 

 

 

Principal Amount

 

 

Fair Value

 

 

Principal Amount

 

 

Fair Value

 

2015 Ten-Year Notes

 

$

742,000

 

 

$

736,064

 

 

$

744,000

 

 

$

727,632

 

2017 Ten-Year Notes

 

 

940,000

 

 

 

923,080

 

 

 

942,500

 

 

 

895,375

 

2018 7.5-Year Notes

 

 

402,688

 

 

 

397,855

 

 

 

403,750

 

 

 

392,041

 

2018 9.25-Year Notes

 

 

379,000

 

 

 

374,831

 

 

 

380,000

 

 

 

365,180

 

2019 Ten-Year Notes

 

 

648,000

 

 

 

613,656

 

 

 

649,688

 

 

 

591,865

 

2021 7.5-Year Notes

 

 

826,625

 

 

 

761,322

 

 

 

828,750

 

 

 

730,958

 

2021 Ten-Year Notes

 

 

972,500

 

 

 

876,223

 

 

 

975,000

 

 

 

830,700

 

 

The Company did not have any outstanding borrowings under its variable funding notes at September 8, 2024 or December 31, 2023.

 

7. Revenue Disclosures

 

Contract Liabilities

 

Contract liabilities primarily consist of deferred franchise fees and deferred development fees. Deferred franchise fees and deferred development fees of $5.2 million and $5.3 million were included in current other accrued liabilities as of September 8, 2024 and December 31, 2023, respectively. Deferred franchise fees and deferred development fees of $18.0 million and $19.9 million were included in long-term other accrued liabilities as of September 8, 2024 and December 31, 2023, respectively.

 

Changes in deferred franchise fees and deferred development fees for the three fiscal quarters of 2024 and 2023 were as follows:

 

 

 

Three Fiscal Quarters Ended

 

 

 

September 8,

 

 

September 10,

 

 

 

2024

 

 

2023

 

Deferred franchise fees and deferred development fees, beginning of period

 

$

25,195

 

 

$

28,225

 

Revenue recognized during the period

 

 

(4,292

)

 

 

(4,680

)

New deferrals due to cash received and other

 

 

2,281

 

 

 

2,456

 

Deferred franchise fees and deferred development fees, end of period

 

$

23,184

 

 

$

26,001

 

Advertising Fund Assets

 

As of September 8, 2024, advertising fund assets, restricted of $111.1 million consisted of $90.0 million of cash and cash equivalents, $13.7 million of accounts receivable and $7.4 million of prepaid expenses. As of September 8, 2024, advertising fund cash and cash equivalents included $1.9 million of cash contributed from U.S. Company-owned stores that had not yet been expended.

 

As of December 31, 2023, advertising fund assets, restricted of $106.3 million consisted of $88.2 million of cash and cash equivalents, $14.0 million of accounts receivable and $4.1 million of prepaid expenses. As of December 31, 2023, advertising fund cash and cash equivalents included $2.1 million of cash contributed from U.S. Company-owned stores that had not yet been expended.

 

Change in Advertising Fund Contributions and Technology Fees

As previously announced, as of March 27, 2023, Domino's National Advertising Fund Inc., the Company’s consolidated not-for-profit advertising subsidiary, effectuated a temporary reduction of 0.25% to its standard 6.0% advertising contribution rate. This temporary reduction expired at the beginning of the second quarter of 2024 and the advertising contribution rate returned to its standard 6.0% as of March 25, 2024.

Additionally, as of March 25, 2024, the Company decreased the U.S. digital per-transaction technology fees that are recognized as the related U.S. franchise retail sales occur by $0.04 to $0.355.

 

11

 

8. Leases

The Company leases certain retail store and supply chain center locations, vehicles, equipment and its corporate headquarters with expiration dates through 2045. Rent expense totaled $21.0 million and $63.2 million in the third quarter and three fiscal quarters of 2024, respectively. Rent expense totaled $19.7 million and $58.8 million in the third quarter and three fiscal quarters of 2023, respectively. Rent expense includes operating lease cost, as well as expense for non-lease components including common area maintenance, real estate taxes and insurance for the Company’s real estate leases. Rent expense also includes the variable rate per mile driven and fixed maintenance charges for the Company’s supply chain center tractors and trailers and expense for short-term rentals. Rent expense for certain short-term supply chain center tractor and trailer rentals was $1.5 million and $5.4 million in the third quarter and three fiscal quarters of 2024, respectively. Rent expense for certain short-term supply chain center tractor and trailer rentals was $1.4 million and $4.1 million in the third quarter and three fiscal quarters of 2023, respectively. Variable rent expense and rent expense for other short-term leases were immaterial in each of the third quarter and three fiscal quarters of 2024 and 2023.

The components of operating and finance lease cost for the third quarter and three fiscal quarters of 2024 and the third quarter and three fiscal quarters of 2023 were as follows:

 

 

Fiscal Quarter Ended

 

 

Three Fiscal Quarters Ended

 

 

 

September 8,

 

 

September 10,

 

 

September 8,

 

 

September 10,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Operating lease cost

 

$

11,545

 

 

$

11,058

 

 

$

34,260

 

 

$

32,734

 

Finance lease cost:

 

 

 

 

 

 

 

 

 

 

 

 

Amortization of right-of-use assets

 

 

1,303

 

 

 

1,282

 

 

 

3,949

 

 

 

3,794

 

Interest on lease liabilities

 

 

943

 

 

 

1,010

 

 

 

2,900

 

 

 

3,008

 

Total finance lease cost

 

$

2,246

 

 

$

2,292

 

 

$

6,849

 

 

$

6,802

 

 

Supplemental cash flow information related to leases for the three fiscal quarters of 2024 and the three fiscal quarters of 2023 was as follows:

 

 

Three Fiscal Quarters Ended

 

 

 

September 8,

 

 

September 10,

 

 

 

2024

 

 

2023

 

Cash paid for amounts included in the measurement of lease liabilities:

 

 

 

 

 

 

Operating cash flows from operating leases

 

$

33,693

 

 

$

31,889

 

Operating cash flows from finance leases

 

 

2,900

 

 

 

3,008

 

Financing cash flows from finance leases

 

 

3,014

 

 

 

2,724

 

Cash paid for amounts included in the measurement of
   financing obligation from sale leaseback:

 

 

 

 

 

 

Operating cash flows from sale leaseback

 

 

896

 

 

 

—

 

Financing cash flows from sale leaseback

 

 

58

 

 

 

—

 

Right-of-use assets obtained in exchange for lease obligations:

 

 

 

 

 

 

Operating leases

 

 

40,800

 

 

 

17,405

 

Finance leases

 

 

1,442

 

 

 

3,452

 

As of September 8, 2024, the Company had additional leases for certain supply chain real estate and certain supply chain vehicles that had not yet commenced with estimated future minimum rental commitments of $162.2 million. These leases are expected to commence in 2024 and 2025 with lease terms of up to 20 years. These undiscounted amounts will be included in the Company’s condensed consolidated balance sheet at the respective commencement dates.

The Company has guaranteed lease payments related to certain franchisees’ lease arrangements. The maximum amount of potential future payments under these guarantees was $14.2 million and $18.5 million as of September 8, 2024 and December 31, 2023, respectively. The Company does not believe these arrangements have or are likely to have a material effect on its results of operations, financial condition, revenues, expenses or liquidity.

12

 

9. Supplemental Disclosures of Cash Flow Information

 

The Company had non-cash investing activities related to accruals for capital expenditures of $6.0 million at September 8, 2024 and $6.7 million at December 31, 2023. The Company also had $4.5 million and $2.6 million in non-cash financing activity related to accruals for excise taxes on share repurchases as of September 8, 2024 and December 31, 2023, respectively.

10. Company-owned Store Transactions

 

During each of the first and second quarters of 2024, the Company refranchised one U.S. Company-owned store for proceeds of less than $0.1 million each. The pre-tax refranchising losses associated with the sale of the related assets and liabilities, including goodwill, were approximately $0.1 million each and were recorded in refranchising loss in the Company’s condensed consolidated statements of income.

 

During the first quarter of 2023, the Company refranchised one U.S. Company-owned store for proceeds of less than $0.1 million. The pre-tax refranchising loss associated with the sale of the related assets and liabilities, including goodwill, was approximately $0.1 million and was recorded in refranchising loss in the Company’s condensed consolidated statements of income.

11. New Accounting Pronouncements

The Company has considered all new accounting standards issued by the Financial Accounting Standards Board (“FASB”). The Company has not yet adopted the following standards:

Accounting Standards Not Yet Adopted

Accounting Standards Update (“ASU”) 2020-04, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures

 

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires disclosure on an annual and interim basis of significant segment expenses that are regularly provided to the chief operating decision maker and included within the reported measure of segment profit or loss. In addition, the ASU requires disclosure of other segment expenses by reportable segment and a description of their composition to permit the reconciliation between segment revenue, significant segment expenses and the reported segment measure of profit or loss. The ASU also requires disclosure of the name and title of the chief operating decision maker.

ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, and early adoption is permitted. The Company is currently evaluating the impact of this accounting standard on its consolidated financial statements.

ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures

 

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires disclosure on an annual basis, of a tabular reconciliation, including both amount and percentage of specific categories of the effective tax rate reconciliation, including state and local income taxes (net of Federal taxes), foreign taxes, effects of changes in tax laws and regulations, effects of cross-border tax laws, tax credits, changes in valuation allowances, nontaxable and nondeductible items and changes in unrecognized tax benefits. Additional disclosures are required for certain items exceeding five percent of income from continuing operations multiplied by the statutory income tax rate. The standard also requires disclosure of income taxes paid between Federal, state and foreign jurisdictions, including further disaggregation of those payments exceeding five percent of the total income taxes paid.

ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, and early adoption is permitted. The Company is currently evaluating the impact of this accounting standard on its consolidated financial statements.

13

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

(Unaudited; tabular amounts in millions, except percentages and store data)

The 2024 and 2023 third quarters referenced herein represent the twelve-week periods ended September 8, 2024 and September 10, 2023, respectively. The 2024 and 2023 three fiscal quarters referenced herein represent the thirty-six-week periods ended September 8, 2024 and September 10, 2023, respectively. In this section, we discuss the results of our operations for the third quarter and three fiscal quarters of 2024 as compared to the third quarter and three fiscal quarters of 2023.

 

Overview

 

Domino’s is the largest pizza company in the world, with more than 21,000 locations in over 90 markets around the world as of September 8, 2024, and operates two distinct service models within its stores with a significant business in both delivery and carryout. We are a highly recognized global brand, and we focus on value while serving neighborhoods locally through our large worldwide network of franchise owners and U.S. Company-owned stores through both the delivery and carryout service models. We have been selling quality, affordable food to our customers since 1960. We became “Domino’s Pizza” in 1965 and opened our first franchised store in 1967. Over more than 60 years, we have built Domino’s into one of the most widely-recognized consumer brands in the world. We believe our commitment to value, convenience, quality and new products continues to keep consumers engaged with the brand.

 

We are primarily a franchisor, with approximately 99% of Domino’s global stores owned and operated by our independent franchisees as of September 8, 2024. Franchising enables an individual to be a business owner and maintain control over all employment-related matters and pricing decisions, while also benefiting from the strength of the Domino’s global brand and operating system with limited capital investment by us.

 

Domino’s business model is straightforward: Domino’s stores handcraft and serve quality food at a competitive price, with easy ordering access and efficient service, enhanced by our technological innovations. Our hand-tossed dough is made fresh and distributed to stores around the world by us and our franchisees.

 

Domino’s generates revenues and earnings by charging royalties and fees to our franchisees. Royalties are ongoing percent-of-sales fees for use of the Domino’s® brand marks. We also generate revenues and earnings by selling food, equipment and supplies to franchisees through our supply chain operations primarily in the U.S. and Canada and by operating a number of Company-owned stores in the United States. Franchisees profit by selling pizza and other complementary items to their local customers. In our international markets, we generally grant geographical rights to the Domino’s Pizza® brand to master franchisees. These master franchisees are charged with developing their geographical area, and they may profit by sub-franchising and selling food and equipment to those sub-franchisees, as well as by running pizza stores. We believe that everyone in the system can benefit from the franchise model, including the end consumer, who can purchase Domino’s menu items for themselves and their family conveniently and economically.

 

Domino’s business model can yield strong returns for our franchise owners and our Company-owned stores. It can also yield significant cash flows to us, through a consistent franchise royalty payment and supply chain revenue stream, through an asset-light model. We have historically returned cash to shareholders through dividend payments and share repurchases. Domino’s financial results are driven largely by retail sales at our franchised and Company-owned stores. Changes in retail sales are primarily driven by same store sales growth and net store growth. We monitor both of these metrics very closely, as they directly impact our revenues and profits, and we strive to consistently increase both metrics. Retail sales drive royalty payments from franchisees, as well as Company-owned store and supply chain revenues.

 

At Domino’s, we believe we have a proven business model for success that has historically driven strong returns for our shareholders. In 2023, we announced our Hungry for MORE strategy aimed at generating MORE sales, MORE stores and MORE profits. The strategic imperatives of our Hungry for MORE strategy are as follows:

 

Most Delicious Food: We believe we have the best pizza in the industry, and our menu has even more mouthwatering options beyond pizza. We will continue to showcase the breadth of our menu, while highlighting the deliciousness of our food through our innovative marketing promotions.

 

Operational Excellence: We are relentless in our focus on convenience, consistency and efficiency for our customers.

 

Renowned Value: We are committed to continuing to offer competitive pricing and personalized value for our customers that is innovative and memorable.

 

Enhanced by Best-in-Class Franchisees: Our franchisees play a vital role in driving results and excitement across the more than 90 markets in which we operate.

14

 

Third Quarter of 2024 Highlights

 

•
MORE Sales: Global retail sales, excluding foreign currency impact (which includes total retail sales at Company-owned and franchised stores worldwide), increased 5.1% as compared to the third quarter of 2023. U.S. retail sales increased 5.1% and international retail sales, excluding foreign currency impact, increased 5.1% as compared to the third quarter of 2023. Same store sales increased 3.0% in our U.S. stores and increased 0.8% in our international stores (excluding foreign currency impact).
•
MORE Stores: Global net store growth of 72.
•
MORE Profits: Income from operations increased 5.0%.

 

Three Fiscal Quarters of 2024 Highlights

 

•
MORE Sales: Global retail sales, excluding foreign currency impact (which includes total retail sales at Company-owned and franchised stores worldwide), increased 6.5% as compared to the three fiscal quarters of 2023. U.S. retail sales increased 6.6% and international retail sales, excluding foreign currency impact, increased 6.5% as compared to the three fiscal quarters of 2023. Same store sales increased 4.5% in our U.S. stores and increased 1.1% in our international stores (excluding foreign currency impact).
•
MORE Stores: Global net store growth of 411.
•
MORE Profits: Income from operations increased 7.7%.

 

Excluding the negative impact of foreign currency, Domino’s experienced global retail sales growth during the third quarter and three fiscal quarters of 2024, driven by same store sales growth and net store growth in both our U.S. and international businesses. These factors also contributed to an increase in income from operations. In the third quarter and three fiscal quarters of 2024, these increases in income from operations were partially offset by higher general and administrative expenses primarily driven by higher labor costs. Overall, we believe our global retail sales growth (excluding foreign currency impact) and our emphasis on technology, operations and marketing initiatives have combined to strengthen our brand. These financial and statistical measures are described in additional detail below.

 

Statistical Measures

 

The tables below outline certain statistical measures we utilize to analyze our performance. This historical data is not necessarily indicative of results to be expected for any future period.

 

Global Retail Sales

Global retail sales is a commonly used statistical measure in the quick-service restaurant industry that is important to understanding performance. Global retail sales refers to total worldwide retail sales at Company-owned and franchised stores. We believe global retail sales information is useful in analyzing revenues because franchisees pay royalties and, in the U.S., advertising fees that are based on a percentage of franchise retail sales. We review comparable industry global retail sales information to assess business trends and to track the growth of the Domino’s Pizza brand, and we believe they are indicative of the financial health of our franchisee base. In addition, supply chain revenues are directly impacted by changes in franchise retail sales in the U.S. and Canada. As a result, sales by Domino’s franchisees have a direct effect on our profitability. Retail sales for franchised stores are reported to us by our franchisees and are not included in our revenues.

 

 

 

Third Quarter
of 2024

 

 

Third Quarter
of 2023

 

 

Three Fiscal Quarters
of 2024

 

 

Three Fiscal Quarters
of 2023

 

Global retail sales:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. stores

 

$

2,168.4

 

 

$

2,062.8

 

 

$

6,602.5

 

 

$

6,195.0

 

International stores

 

 

2,223.6

 

 

 

2,160.9

 

 

 

6,581.9

 

 

 

6,352.2

 

Total

 

$

4,392.0

 

 

$

4,223.7

 

 

$

13,184.4

 

 

$

12,547.2

 

 

15

 

Global Retail Sales Growth (excluding foreign currency impact)

 

Global retail sales growth (excluding foreign currency impact) is a commonly used statistical measure in the quick-service restaurant industry that is important to understanding performance. Global retail sales growth, excluding foreign currency impact, is calculated as the change of international local currency global retail sales against the comparable period of the prior year. Changes in global retail sales growth, excluding foreign currency impact are primarily driven by same store sales growth and net store growth.

 

 

 

Third Quarter
of 2024

 

Third Quarter
of 2023

 

Three Fiscal Quarters
of 2024

 

Three Fiscal Quarters
of 2023

U.S. stores

 

+ 5.1%

 

+ 0.9%

 

+ 6.6%

 

+ 2.5%

International stores (excluding foreign currency impact) (1)

 

+ 5.1%

 

+ 9.4%

 

+ 6.5%

 

+ 8.9%

Total (excluding foreign currency impact) (2)

 

+ 5.1%

 

+ 5.1%

 

+ 6.5%

 

+ 5.7%

 

 

(1)

 

2024 and 2023 third quarter and three fiscal quarters figures each exclude the impact of the Russia market. Including the impact of the Russia market, international stores retail sales growth, excluding foreign currency impact, was 4.8% and 6.0% for the third quarter and three fiscal quarters of 2024, respectively, and 9.0% and 8.5% for the third quarter and three fiscal quarters of 2023, respectively.

(2)

 

2024 and 2023 third quarter and three fiscal quarters figures each exclude the impact of the Russia market. Including the impact of the Russia market, total global retail sales growth, excluding foreign currency impact, was 5.0% and 6.3% for the third quarter and three fiscal quarters of 2024, respectively, and 4.9% and 5.5% for the third quarter and three fiscal quarters of 2023, respectively.

 

Same Store Sales Growth

 

Same store sales growth is a commonly used statistical measure in the quick-service restaurant industry that is important to understanding performance. Same store sales growth is calculated for a given period by including only sales from stores that also had sales in the comparable weeks of both periods. International same store sales growth is calculated similarly to U.S. same store sales growth. Changes in international same store sales are reported on a constant dollar basis, which reflects changes in international local currency sales. Same store sales growth for transferred stores is reflected in their current classification.

 

 

 

Third Quarter
of 2024

 

Third Quarter
of 2023

 

Three Fiscal Quarters
of 2024

 

Three Fiscal Quarters
of 2023

U.S. Company-owned stores

 

+ 3.1%

 

+ 2.9%

 

+ 5.4%

 

+ 5.2%

U.S. franchise stores

 

+ 3.0%

 

(0.7)%

 

+ 4.4%

 

+ 0.8%

U.S. stores

 

+ 3.0%

 

(0.6)%

 

+ 4.5%

 

+ 1.0%

International stores (excluding foreign currency impact)

 

+ 0.8%

 

+ 3.3%

 

+ 1.1%

 

+ 2.6%

 

U.S. same store sales increased 3.0% in the third quarter of 2024, rolling over a decrease in U.S. same store sales of 0.6% in the third quarter of 2023. U.S. same store sales increased 4.5% in the three fiscal quarters of 2024, rolling over an increase in U.S. same store sales of 1.0% in the three fiscal quarters of 2023. The increases in the U.S. in the third quarter and three fiscal quarters of 2024 were primarily driven by higher same store sales in both our delivery and carryout businesses, driven by our Domino’s Rewards loyalty program and other national offers. International same store sales (excluding foreign currency impact) increased 0.8% in the third quarter of 2024, rolling over an increase in international same store sales (excluding foreign currency impact) of 3.3% in the third quarter of 2023. International same store sales (excluding foreign currency impact) increased 1.1% in the three fiscal quarters of 2024, rolling over an increase in international same store sales (excluding foreign currency impact) of 2.6% in the three fiscal quarters of 2023. The increases in international same store sales (excluding foreign currency impact) in the third quarter and three fiscal quarters of 2024 were driven primarily by a higher average ticket per transaction across our international markets.

16

 

Store Growth Activity

 

Net store growth is a commonly used statistical measure in the quick-service restaurant industry that is important to understanding performance. Net store growth is calculated by netting gross store openings with gross store closures during the period. Transfers between Company-owned stores and franchised stores are excluded from the calculation of net store growth.

 

 

 

U.S.
Company-
owned
 Stores

 

 

U.S.
Franchise
Stores

 

 

Total
U.S.
Stores

 

 

International Stores

 

 

Total

 

Store count at June 16, 2024

 

 

289

 

 

 

6,617

 

 

 

6,906

 

 

 

14,024

 

 

 

20,930

 

Openings

 

 

2

 

 

 

22

 

 

 

24

 

 

 

184

 

 

 

208

 

Closings

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(136

)

 

 

(136

)

Store count at September 8, 2024

 

 

291

 

 

 

6,639

 

 

 

6,930

 

 

 

14,072

 

 

 

21,002

 

Third quarter 2024 net store growth

 

 

2

 

 

 

22

 

 

 

24

 

 

 

48

 

 

 

72

 

Trailing four quarters net store growth

 

 

5

 

 

 

163

 

 

 

168

 

 

 

637

 

 

 

805

 

 

Russia Market

 

On August 21, 2023, our master franchisee that owned and operated Domino’s Pizza stores in Russia announced its intent to file for bankruptcy with respect to the stores in that market. Therefore, as of August 21, 2023, we have considered the stores in the Russia market to be closed and they are excluded from our ending store count as of the end of the third quarter of 2023. We have presented our statistical measure of global retail sales growth, excluding foreign currency impact, for the third quarter and three fiscal quarters of 2024 excluding the impact of the retail sales from the Russia market. We believe the impact of the Russia market on our statistical measure of same store sales growth for the periods presented was immaterial, and we also believe the impact of the Russia market on our consolidated statements of income related to international franchise royalties and fee revenues and general and administrative expenses for the third quarter and three fiscal quarters of 2023 was immaterial.

Income Statement Data

 

 

 

Third Quarter
of 2024

 

 

Third Quarter
of 2023

 

 

Three Fiscal Quarters
of 2024

 

 

Three Fiscal Quarters
of 2023

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Company-owned stores

 

$

89.2

 

 

 

 

 

$

86.3

 

 

 

 

 

$

274.1

 

 

 

 

 

$

258.9

 

 

 

 

U.S. franchise royalties and fees

 

 

144.1

 

 

 

 

 

 

138.3

 

 

 

 

 

 

442.2

 

 

 

 

 

 

410.5

 

 

 

 

Supply chain

 

 

651.3

 

 

 

 

 

 

618.1

 

 

 

 

 

 

1,969.8

 

 

 

 

 

 

1,858.0

 

 

 

 

International franchise royalties and fees

 

 

74.6

 

 

 

 

 

 

73.1

 

 

 

 

 

 

220.3

 

 

 

 

 

 

213.3

 

 

 

 

U.S. franchise advertising

 

 

120.9

 

 

 

 

 

 

111.5

 

 

 

 

 

 

356.2

 

 

 

 

 

 

335.7

 

 

 

 

Total revenues

 

 

1,080.1

 

 

 

100.0

%

 

 

1,027.4

 

 

 

100.0

%

 

 

3,262.5

 

 

 

100.0

%

 

 

3,076.4

 

 

 

100.0

%

Cost of sales:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Company-owned stores

 

 

74.2

 

 

 

 

 

 

72.6

 

 

 

 

 

 

226.7

 

 

 

 

 

 

214.6

 

 

 

 

Supply chain

 

 

582.2

 

 

 

 

 

 

556.6

 

 

 

 

 

 

1,753.1

 

 

 

 

 

 

1,673.4

 

 

 

 

Total cost of sales

 

 

656.4

 

 

 

60.8

%

 

 

629.2

 

 

 

61.2

%

 

 

1,979.9

 

 

 

60.7

%

 

 

1,888.0

 

 

 

61.4

%

Gross margin

 

 

423.7

 

 

 

39.2

%

 

 

398.2

 

 

 

38.8

%

 

 

1,282.6

 

 

 

39.3

%

 

 

1,188.4

 

 

 

38.6

%

General and administrative

 

 

104.0

 

 

 

9.6

%

 

 

97.2

 

 

 

9.5

%

 

 

321.0

 

 

 

9.8

%

 

 

290.2

 

 

 

9.4

%

U.S. franchise advertising

 

 

120.9

 

 

 

11.2

%

 

 

111.5

 

 

 

10.9

%

 

 

356.2

 

 

 

10.9

%

 

 

335.7

 

 

 

10.9

%

Refranchising loss

 

 

—

 

 

 

0.0

%

 

 

—

 

 

 

0.0

%

 

 

0.2

 

 

 

0.0

%

 

 

0.1

 

 

 

0.0

%

Income from operations

 

 

198.8

 

 

 

18.4

%

 

 

189.4

 

 

 

18.4

%

 

 

605.3

 

 

 

18.6

%

 

 

562.3

 

 

 

18.3

%

Other income

 

 

26.2

 

 

 

2.4

%

 

 

28.2

 

 

 

2.8

%

 

 

18.9

 

 

 

0.6

%

 

 

13.3

 

 

 

0.4

%

Interest expense, net

 

 

(40.4

)

 

 

(3.7

)%

 

 

(42.1

)

 

 

(4.1

)%

 

 

(123.0

)

 

 

(3.8

)%

 

 

(128.6

)

 

 

(4.2

)%

Income before provision for income taxes

 

 

184.6

 

 

 

17.1

%

 

 

175.6

 

 

 

17.1

%

 

 

501.2

 

 

 

15.4

%

 

 

446.9

 

 

 

14.5

%

Provision for income taxes

 

 

37.7

 

 

 

3.5

%

 

 

27.9

 

 

 

2.7

%

 

 

86.5

 

 

 

2.7

%

 

 

85.1

 

 

 

2.7

%

Net income

 

$

146.9

 

 

 

13.6

%

 

$

147.7

 

 

 

14.4

%

 

$

414.7

 

 

 

12.7

%

 

$

361.8

 

 

 

11.8

%

 

 

 

 

 

17

 

Revenues

 

 

 

Third Quarter
of 2024

 

 

Third Quarter
of 2023

 

 

Three Fiscal Quarters
of 2024

 

 

Three Fiscal Quarters
of 2023

 

U.S. Company-owned stores

 

$

89.2

 

 

 

8.3

%

 

$

86.3

 

 

 

8.4

%

 

$

274.1

 

 

 

8.4

%

 

$

258.9

 

 

 

8.4

%

U.S. franchise royalties and fees

 

 

144.1

 

 

 

13.3

%

 

 

138.3

 

 

 

13.5

%

 

 

442.2

 

 

 

13.5

%

 

 

410.5

 

 

 

13.4

%

Supply chain

 

 

651.3

 

 

 

60.3

%

 

 

618.1

 

 

 

60.1

%

 

 

1,969.8

 

 

 

60.4

%

 

 

1,858.0

 

 

 

60.4

%

International franchise royalties and fees

 

 

74.6

 

 

 

6.9

%

 

 

73.1

 

 

 

7.1

%

 

 

220.3

 

 

 

6.8

%

 

 

213.3

 

 

 

6.9

%

U.S. franchise advertising

 

 

120.9

 

 

 

11.2

%

 

 

111.5

 

 

 

10.9

%

 

 

356.2

 

 

 

10.9

%

 

 

335.7

 

 

 

10.9

%

Total revenues

 

$

1,080.1

 

 

 

100.0

%

 

$

1,027.4

 

 

 

100.0

%

 

$

3,262.5

 

 

 

100.0

%

 

$

3,076.4

 

 

 

100.0

%

 

Revenues primarily consist of retail sales from our Company-owned stores, royalties and fees and advertising contributions from our U.S. franchised stores, royalties and fees from our international franchised stores and sales of food, equipment and supplies from our supply chain centers to substantially all of our U.S. franchised stores and certain international franchised stores. Company-owned store and franchised store revenues may vary from period to period due to changes in store count mix. Supply chain revenues may vary significantly from period to period as a result of fluctuations in commodity prices as well as the mix of products we sell.

Consolidated revenues increased $52.8 million, or 5.1%, in the third quarter of 2024 as compared to the third quarter of 2023. Consolidated revenues increased $186.1 million, or 6.0%, in the three fiscal quarters of 2024 as compared to the three fiscal quarters of 2023. The increases in consolidated revenues in both the third quarter and three fiscal quarters of 2024 were primarily driven by higher supply chain and U.S. stores revenues. These changes in revenues are described in more detail below.

U.S. Stores Revenues

 

 

 

Third Quarter
of 2024

 

 

Third Quarter
of 2023

 

 

Three Fiscal Quarters
of 2024

 

 

Three Fiscal Quarters
of 2023

 

U.S. Company-owned stores

 

$

89.2

 

 

 

25.2

%

 

$

86.3

 

 

 

25.7

%

 

$

274.1

 

 

 

25.6

%

 

$

258.9

 

 

 

25.8

%

U.S. franchise royalties and fees

 

 

144.1

 

 

 

40.7

%

 

 

138.3

 

 

 

41.2

%

 

 

442.2

 

 

 

41.2

%

 

 

410.5

 

 

 

40.8

%

U.S. franchise advertising

 

 

120.9

 

 

 

34.1

%

 

 

111.5

 

 

 

33.2

%

 

 

356.2

 

 

 

33.2

%

 

 

335.7

 

 

 

33.4

%

Total U.S. stores revenues

 

$

354.2

 

 

 

100.0

%

 

$

336.1

 

 

 

100.0

%

 

$

1,072.4

 

 

 

100.0

%

 

$

1,005.1

 

 

 

100.0

%

 

U.S. Company-owned Stores

 

Revenues from U.S. Company-owned store operations increased $2.9 million, or 3.4%, in the third quarter of 2024, and increased $15.2 million, or 5.9%, in the three fiscal quarters of 2024 primarily due to higher same store sales.

 

U.S. Company-owned same store sales increased 3.1% in the third quarter of 2024 and increased 2.9% in the third quarter of 2023. U.S. Company-owned same store sales increased 5.4% in the three fiscal quarters of 2024 and increased 5.2% in the three fiscal quarters of 2023.

 

U.S. Franchise Royalties and Fees

 

Revenues from U.S. franchise royalties and fees increased $5.8 million, or 4.2%, in the third quarter of 2024 primarily due to higher same store sales and net store growth. Additionally, U.S. franchise royalties and fees benefited from an increase in digital transactions which resulted in an increase in fees paid by our franchisees for the use of our technology platforms, but this increase was offset by a $0.04 decrease in the digital per transaction technology fee to $0.355 effectuated as of March 25, 2024. Revenues from U.S. franchise royalties and fees increased $31.7 million, or 7.7%, in the three fiscal quarters of 2024 primarily due to higher same store sales and an increase in fees paid by U.S. franchisees for the use of our technology platforms, as well as net store growth.

U.S. franchise same store sales increased 3.0% in the third quarter of 2024 and declined 0.7% in the third quarter of 2023. U.S. franchise same store sales increased 4.4% in the three fiscal quarters of 2024 and increased 0.8% in the three fiscal quarters of 2023.

 

 

18

 

U.S. Franchise Advertising

 

Revenues from U.S. franchise advertising increased $9.4 million, or 8.4%, in the third quarter of 2024 primarily due to the return to the standard 6.0% advertising contribution rate at the beginning of the second quarter of 2024 following the end of the temporary reduction to 5.75% which began in the second quarter of 2023, as well as higher same store sales and net store growth. An increase in brand promotions partially offset the increase in U.S. franchise advertising revenues in the third quarter of 2024. Revenues from U.S. franchise advertising increased $20.5 million, or 6.1%, in the three fiscal quarters of 2024 primarily due to higher same store sales, net store growth and the return to the standard 6.0% advertising contribution rate at the beginning of the second quarter of 2024 following the end of the temporary reduction to 5.75% which began in the second quarter of 2023. An increase in brand promotions partially offset the increase in U.S. franchise advertising revenues in the three fiscal quarters of 2024.

Supply Chain

 

Supply chain revenues increased $33.2 million, or 5.4%, in the third quarter of 2024 primarily due to higher order volumes, as well as an increase in our food basket pricing to stores, but these increases were partially offset by a shift in the relative mix of products we sell. Our food basket pricing to stores increased 1.3% in the third quarter of 2024, which resulted in an estimated $9 million increase in supply chain revenues. The food basket pricing change, a statistical measure utilized by management, is calculated as the percentage change of the food basket (including both food and cardboard products) purchased by an average U.S. store (based on average weekly unit sales) from our U.S. supply chain centers against the comparable period of the prior year. We believe this measure is important to understanding Company performance because as our food basket prices fluctuate, our revenues, cost of sales and gross margin percentages in our supply chain segment also fluctuate. Supply chain revenues increased $111.7 million, or 6.0%, in the three fiscal quarters of 2024 primarily due to higher order volumes, but this increase was partially offset by a shift in the relative mix of products we sell. Our food basket pricing was flat in the three fiscal quarters of 2024 as compared to the three fiscal quarters of 2023.

 

International Franchise Royalties and Fee Revenues

Revenues from international franchise royalties and fees increased $1.5 million, or 2.0%, in the third quarter of 2024, and increased $7.0 million, or 3.3%, in the three fiscal quarters of 2024 primarily due to an increase in the average number of international franchised stores open during the period resulting from net store growth as well as same store sales growth (excluding foreign currency impact), but these increases were partially offset by the negative impact of changes in foreign currency exchange rates of approximately $1.4 million in the third quarter of 2024 and $5.6 million in the three fiscal quarters of 2024. The impact of changes in foreign currency exchange rates on international franchise royalty revenues, a statistical measure utilized by management, is calculated as the difference in international franchise royalty revenues resulting from translating current year local currency results to U.S. dollars at current year exchange rates as compared to prior year exchange rates. We believe this measure is important to understanding Company performance given the significant variability in international franchise royalty revenues that can be driven by changes in foreign currency exchange rates.

International franchise same store sales increased 0.8% in the third quarter of 2024, and increased 3.3% in the third quarter of 2023, each excluding the impact of foreign currency exchange rates. International franchise same store sales increased 1.1% in the three fiscal quarters of 2024, and increased 2.6% in the three fiscal quarters of 2023, each excluding the impact of foreign currency exchange rates.

19

 

Cost of Sales / Gross Margin

 

 

 

 

Third Quarter
of 2024

 

 

Third Quarter
of 2023

 

 

Three Fiscal Quarters
of 2024

 

 

Three Fiscal Quarters
of 2023

 

Total revenues

 

$

1,080.1

 

 

 

100.0

%

 

$

1,027.4

 

 

 

100.0

%

 

$

3,262.5

 

 

 

100.0

%

 

$

3,076.4

 

 

 

100.0

%

Total cost of sales

 

 

656.4

 

 

 

60.8

%

 

 

629.2

 

 

 

61.2

%

 

 

1,979.9

 

 

 

60.7

%

 

 

1,888.0

 

 

 

61.4

%

Gross margin

 

$

423.7

 

 

 

39.2

%

 

$

398.2

 

 

 

38.8

%

 

$

1,282.6

 

 

 

39.3

%

 

$

1,188.4

 

 

 

38.6

%

 

Consolidated cost of sales consists of U.S. Company-owned store and supply chain costs incurred to generate related revenues. Components of consolidated cost of sales primarily include food, labor, delivery and occupancy costs. Consolidated gross margin (which we define as revenues less cost of sales) increased $25.5 million, or 6.4%, in the third quarter of 2024, and increased $94.2 million, or 7.9%, in the three fiscal quarters of 2024 primarily due to higher global franchise revenues, as well as gross margin dollar growth within supply chain, discussed below. Franchise revenues do not have a cost of sales component, so changes in these revenues have a disproportionate effect on gross margin. Additionally, as food basket prices fluctuate, revenues, cost of sales and gross margin percentages in our supply chain segment also fluctuate, and further, cost of sales, gross margins and gross margin percentages for our U.S. Company-owned stores also fluctuate.

As a percentage of revenues, the consolidated gross margin increased 0.4 and 0.7 percentage points in the third quarter and three fiscal quarters of 2024, respectively. U.S. Company-owned store gross margin increased 1.0 percentage point in the third quarter of 2024, and increased 0.2 percentage points in the three fiscal quarters of 2024. Supply chain gross margin increased 0.6 percentage points in the third quarter of 2024, and increased 1.1 percentage points in the three fiscal quarters of 2024. These changes in gross margin are described in more detail below.

U.S. Company-Owned Store Gross Margin

 

 

 

Third Quarter
of 2024

 

 

Third Quarter
of 2023

 

 

Three Fiscal Quarters
of 2024

 

 

Three Fiscal Quarters
of 2023

 

Revenues

 

$

89.2

 

 

 

100.0

%

 

$

86.3

 

 

 

100.0

%

 

$

274.1

 

 

 

100.0

%

 

$

258.9

 

 

 

100.0

%

Cost of sales

 

 

74.2

 

 

 

83.2

%

 

 

72.6

 

 

 

84.2

%

 

 

226.7

 

 

 

82.7

%

 

 

214.6

 

 

 

82.9

%

Store gross margin

 

$

15.0

 

 

 

16.8

%

 

$

13.7

 

 

 

15.8

%

 

$

47.4

 

 

 

17.3

%

 

$

44.3

 

 

 

17.1

%

 

U.S. Company-owned store gross margin (which does not include certain store-level costs such as royalties and advertising) increased $1.3 million, or 9.6%, in the third quarter of 2024, and increased $3.1 million, or 7.0%, in the three fiscal quarters of 2024. As a percentage of store revenues, U.S. Company-owned store gross margin increased 1.0 percentage point in the third quarter of 2024, and increased 0.2 percentage points in the three fiscal quarters of 2024. These changes in gross margin as a percentage of revenues are discussed in additional detail below.

•
Food costs were 29.0% in both the third quarter of 2024 and 2023. Food costs decreased 0.2 percentage points to 28.8% in the three fiscal quarters of 2024.
•
Labor costs decreased 0.7 percentage points to 31.1% in the third quarter of 2024 due to sales leverage driven by higher customer transaction counts, as well as store level productivity. Labor costs increased 0.1 percentage points to 31.3% in the three fiscal quarters of 2024 due to higher wage rates in our U.S. Company-owned stores.
•
Sales leverage driven by higher customer transaction counts contributed to the remaining increases in U.S. Company-owned store gross margin as a percentage of revenues.

Supply Chain Gross Margin

 

 

Third Quarter
of 2024

 

 

Third Quarter
of 2023

 

 

Three Fiscal Quarters
of 2024

 

 

Three Fiscal Quarters
of 2023

 

Revenues

 

$

651.3

 

 

 

100.0

%

 

$

618.1

 

 

 

100.0

%

 

$

1,969.8

 

 

 

100.0

%

 

$

1,858.0

 

 

 

100.0

%

Cost of sales

 

 

582.2

 

 

 

89.4

%

 

 

556.6

 

 

 

90.0

%

 

 

1,753.1

 

 

 

89.0

%

 

 

1,673.4

 

 

 

90.1

%

Supply chain gross margin

 

$

69.1

 

 

 

10.6

%

 

$

61.5

 

 

 

10.0

%

 

$

216.6

 

 

 

11.0

%

 

$

184.6

 

 

 

9.9

%

 

Supply chain gross margin increased $7.6 million, or 12.4%, in the third quarter of 2024, and increased $32.0 million, or 17.3%, in the three fiscal quarters of 2024. As a percentage of supply chain revenues, the supply chain gross margin increased 0.6 percentage points in the third quarter of 2024, and increased 1.1 percentage points in the three fiscal quarters of 2024. The increases in supply chain gross margin as a percentage of revenues in the third quarter and three fiscal quarters of 2024 were primarily due to procurement productivity.

20

 

General and Administrative Expenses

General and administrative expenses increased $6.8 million, or 7.0%, in the third quarter of 2024, and increased $30.8 million, or 10.6%, in the three fiscal quarters of 2024, each primarily driven by higher labor costs.

 

U.S. Franchise Advertising Expenses

U.S. franchise advertising expenses increased $9.4 million, or 8.4%, in the third quarter of 2024, and increased $20.5 million, or 6.1%, in the three fiscal quarters of 2024 consistent with the increases in U.S. franchise advertising revenues. U.S. franchise advertising costs are accrued and expensed when the related U.S. franchise advertising revenues are recognized, as our consolidated not-for-profit advertising fund is obligated to expend such revenues on advertising and other activities that promote the Domino’s brand, and these revenues cannot be used for general corporate purposes.

 

Refranchising Loss

 

During each of the first and second quarters of 2024, we refranchised one U.S. Company-owned store for proceeds of less than $0.1 million each. The pre-tax refranchising losses associated with the sale of the related assets and liabilities, including goodwill, were approximately $0.1 million each and were recorded in refranchising loss in our condensed consolidated statements of income.

 

During the first quarter of 2023, we refranchised one U.S. Company-owned store for proceeds of less than $0.1 million. The pre-tax refranchising loss associated with the sale of the related assets and liabilities, including goodwill, was approximately $0.1 million and was recorded in refranchising loss in our condensed consolidated statements of income.

 

Other Income

During the third quarter and three fiscal quarters of 2024, we recorded a $26.2 million and $18.9 million unrealized gain, respectively, on our investment in DPC Dash (Note 6). During the third quarter and three fiscal quarters of 2023, we recorded a $28.2 million and $13.3 million unrealized gain, respectively, on our investment in DPC Dash. These unrealized gains were based on the active exchange quoted price for the equity security.

 

Interest Expense, Net

Interest expense, net, decreased $1.7 million, or 4.0%, in the third quarter of 2024, and decreased $5.6 million, or 4.4%, in the three fiscal quarters of 2024, each driven by higher interest income on our cash equivalents.

Our weighted average borrowing rate was 3.8% in each of the third quarter and three fiscal quarters of 2024 and 2023.

Provision for Income Taxes

Provision for income taxes increased $9.8 million, or 35.1%, in the third quarter of 2024 due to a higher effective tax rate and higher income before provision for income taxes. The effective tax rate increased to 20.4% in the third quarter of 2024 as compared to 15.9% in the third quarter of 2023, driven by lower foreign tax credits as well as a 0.9 percentage point unfavorable change in the impact of excess tax benefits from equity-based compensation, which is recorded as a reduction to the provision for income taxes.

Provision for income taxes increased $1.4 million, or 1.6%, in the three fiscal quarters of 2024 due to higher income before provision for income taxes, partially offset by a lower effective tax rate. The effective tax rate decreased to 17.3% in the three fiscal quarters of 2024 as compared to 19.0% in the three fiscal quarters of 2023, driven by a 3.7 percentage point favorable change in the impact of excess tax benefits from equity-based compensation, which is recorded as a reduction to the provision for income taxes.

21

 

Segment Income

We evaluate the performance of our reportable segments and allocate resources to them based on earnings before interest, taxes, depreciation, amortization and other, referred to as Segment Income. Segment Income for each of our reportable segments is summarized in the table below. Other Segment Income primarily includes corporate administrative costs that are not allocable to a reportable segment, including labor, computer expenses, professional fees, travel and entertainment, rent, insurance and other corporate administrative costs.

 

 

 

Third Quarter
of 2024

 

 

Third Quarter
of 2023

 

 

Three Fiscal Quarters
of 2024

 

 

Three Fiscal Quarters
of 2023

 

U.S. stores

 

$

128.6

 

 

$

120.4

 

 

$

394.2

 

 

$

356.6

 

Supply chain

 

 

61.2

 

 

 

55.3

 

 

 

190.7

 

 

 

163.8

 

International franchise

 

 

62.4

 

 

 

61.5

 

 

 

180.8

 

 

 

178.5

 

Other

 

 

(22.8

)

 

 

(19.8

)

 

 

(67.2

)

 

 

(54.4

)

U.S. Stores

U.S. stores Segment Income increased $8.2 million, or 6.8%, in the third quarter of 2024 primarily due to higher U.S. franchise royalties and fees revenues, as well as the $1.3 million increase in U.S. Company-owned store gross margin, each as discussed above. U.S. stores Segment Income increased $37.6 million, or 10.5%, in the three fiscal quarters of 2024 primarily due to higher U.S. franchise royalties and fees revenues, as well as the $3.1 million increase in U.S. Company-owned store gross margin, each as discussed above. U.S. franchise revenues do not have a cost of sales component, so changes in these revenues have a disproportionate effect on U.S. stores Segment Income. U.S. franchise advertising costs are accrued and expensed when the related U.S. franchise advertising revenues are recognized and had no impact on U.S. stores Segment Income.

 

Supply Chain

Supply chain Segment Income increased $5.9 million, or 10.7%, in the third quarter of 2024 primarily due to the $7.6 million increase in supply chain gross margin, as discussed above. Supply chain Segment Income increased $26.9 million, or 16.4%, in the three fiscal quarters of 2024 primarily due to the $32.0 million increase in supply chain gross margin, as discussed above.

 

International Franchise

International franchise Segment Income increased $0.9 million, or 1.5%, in the third quarter of 2024, and increased $2.3 million, or 1.3%, in the three fiscal quarters of 2024 primarily due to higher international franchise royalties and fees revenues, as discussed above. International franchise revenues do not have a cost of sales component, so changes in these revenues have a disproportionate effect on international franchise Segment Income. The increase in international franchise Segment Income in the three fiscal quarters of 2024 was partially offset by expenses for our Worldwide Rally that takes place every two years.

 

Other

Other Segment Income decreased $3.0 million, or 15.2%, in the third quarter of 2024, and decreased $12.8 million, or 23.5%, in the three fiscal quarters of 2024 primarily driven by higher labor costs.

22

 

Liquidity and Capital Resources

 

Historically, our receivable collection periods and inventory turn rates are faster than the normal payment terms on our current liabilities resulting in efficient deployment of working capital. We generally collect our receivables within three weeks from the date of the related sale and we generally experience multiple inventory turns per month. In addition, our sales are not typically seasonal, which further limits variations in our working capital requirements. As of September 8, 2024, we had working capital of $174.4 million, excluding restricted cash and cash equivalents of $185.4 million, advertising fund assets, restricted, of $111.1 million and advertising fund liabilities of $109.2 million. Working capital includes total unrestricted cash and cash equivalents of $189.1 million.

 

Our primary sources of liquidity are cash flows from operations and availability of borrowings under our 2022 and 2021 Variable Funding Notes (as defined below). During the third quarter and three fiscal quarters of 2024, we experienced an increase in both U.S. and international same store sales (excluding foreign currency impact) versus the comparable periods in the prior year. Additionally, both our U.S. and international businesses grew store counts during the third quarter and three fiscal quarters of 2024. These factors contributed to our continued ability to generate positive operating cash flows. In addition to our cash flows from operations, we have two variable funding note facilities. These facilities include our Series 2022-1 Variable Funding Senior Secured Notes, Class A-1 Notes (the “2022 Variable Funding Notes”), which allows for advances of up to $120.0 million, as well as our Series 2021-1 Variable Funding Senior Secured Notes, Class A-1 Notes (the “2021 Variable Funding Notes,” and, together with the 2022 Variable Funding Notes, the “2022 and 2021 Variable Funding Notes”), which allows for advances of up to $200.0 million and certain other credit instruments, including letters of credit. The letters of credit primarily relate to our casualty insurance programs. As of September 8, 2024, we had no outstanding borrowings and $278.9 million of available borrowing capacity under our 2022 and 2021 Variable Funding Notes, net of letters of credit issued of $41.1 million.

 

We expect to continue to use our unrestricted cash and cash equivalents, cash flows from operations, any excess cash from our recapitalization transactions and available borrowings under our 2022 and 2021 Variable Funding Notes to, among other things, fund working capital requirements, invest in our core business and other strategic opportunities, repay outstanding borrowings under our securitized debt, pay dividends and repurchase and retire shares of our common stock.

 

Our ability to continue to fund these items and continue to service our debt could be adversely affected by the occurrence of any of the events described under “Risk Factors” in our 2023 Form 10-K. There can be no assurance that our business will generate sufficient cash flows from operations or that future borrowings will be available under our 2022 and 2021 Variable Funding Notes or otherwise to enable us to service our indebtedness, or to make anticipated capital expenditures. Our future operating performance and our ability to service, extend or refinance our outstanding senior notes and to service, extend or refinance our 2022 and 2021 Variable Funding Notes will be subject to future economic conditions and to financial, business and other factors, many of which are beyond our control.

 

Restricted Cash

As of September 8, 2024, we had $134.2 million of restricted cash held for future principal and interest payments and other working capital requirements of our asset-backed securitization structure, $51.0 million of restricted cash held in a three-month interest reserve as required by the related debt agreements and $0.2 million of other restricted cash for a total of $185.4 million of restricted cash and cash equivalents. As of September 8, 2024, we also held $90.0 million of advertising fund restricted cash and cash equivalents, which can only be used for activities that promote the Domino’s brand.

 

Long-Term Debt

As of September 8, 2024, we had approximately $4.98 billion of long-term debt, of which $4.9 million was classified as a current liability. As of September 8, 2024, our fixed rate notes from the recapitalizations we completed in 2021, 2019, 2018, 2017 and 2015 had original scheduled principal payments of $38.6 million in the remainder of 2024, $1.17 billion in 2025, $39.3 million in 2026, $1.31 billion in 2027, $811.5 million in 2028, $625.9 million in 2029, $10.0 million in 2030 and $905.0 million in 2031. However, in accordance with our debt agreements, the payment of principal on our outstanding senior notes may be suspended if our Holdco Leverage Ratio is less than or equal to 5.0x total debt to adjusted EBITDA, as defined in the related agreements, and no catch-up provisions are applicable. As of the end of the first, second, and third quarters of 2024, we had a Holdco Leverage Ratio of less than 5.0x, and accordingly, did not make the previously scheduled debt amortization payments on our outstanding notes beginning in the second quarter of 2024. Accordingly, all principal amounts of our outstanding notes have been classified as long-term debt in our condensed consolidated balance sheet as of September 8, 2024.

 

The notes are subject to certain financial and non-financial covenants, including a debt service coverage ratio calculation. The covenant requires a minimum coverage ratio of 1.75x total debt service to securitized net cash flow, as defined in the related agreements. In the event that certain covenants are not met, the notes may become due and payable on an accelerated schedule.

 

23

 

Share Repurchase Programs

 

Our share repurchase programs have historically been funded by excess operating cash flows, excess proceeds from our recapitalization transactions and borrowings under our 2022 and 2021 Variable Funding Notes. On February 21, 2024, our Board of Directors authorized an additional share repurchase program to repurchase up to $1.0 billion of our common stock, in addition to the $141.3 million that was previously remaining for a total authorization of $1.14 billion for future share repurchases as of that date.

During the third quarter and three fiscal quarters of 2024, we repurchased and retired 443,302 and 499,674 shares of our common stock under our Board of Directors-approved share repurchase program for a total of approximately $190.0 million and $215.0 million, respectively. As of September 8, 2024, we had a total remaining authorized amount for share repurchases of approximately $926.3 million.

 

Dividends

 

On July 16, 2024, our Board of Directors declared a $1.51 per share quarterly dividend on our outstanding common stock for shareholders of record as of September 13, 2024, which was paid on September 30, 2024. We had approximately $54.1 million accrued for common stock dividends at September 8, 2024. Subsequent to the end of the third quarter of 2024, on October 8, 2024, our Board of Directors declared a $1.51 per share quarterly dividend on our outstanding common stock for shareholders of record as of December 13, 2024, to be paid on December 27, 2024.

 

Sources and Uses of Cash

The following table illustrates the main components of our cash flows:

 

 

Three Fiscal Quarters
of 2024

 

 

Three Fiscal Quarters
of 2023

 

Cash flows provided by (used in)

 

 

 

 

 

 

Net cash provided by operating activities

 

$

446.9

 

 

$

422.1

 

Net cash used in investing activities

 

 

(71.9

)

 

 

(60.0

)

Net cash used in financing activities

 

 

(313.0

)

 

 

(337.2

)

Effect of exchange rate changes on cash

 

 

(0.6

)

 

 

(0.3

)

Change in cash and cash equivalents, restricted cash and cash equivalents

 

$

61.4

 

 

$

24.6

 

 

Operating Activities

 

Cash provided by operating activities increased $24.7 million in the three fiscal quarters of 2024, as a result of higher net income, excluding non-cash operating activities and a positive change in advertising fund assets and liabilities, restricted, partially offset by the negative impact of changes in operating assets and liabilities. Net income increased $52.9 million and non-cash adjustments increased $8.8 million, resulting in an overall increase to cash provided by operating activities in the three fiscal quarters of 2024 as compared to the three fiscal quarters of 2023 of $61.7 million. Additionally, an $8.3 million positive impact of changes in advertising fund assets and liabilities, restricted, in the three fiscal quarters of 2024 as compared to the three fiscal quarters of 2023 was a result of receipts for advertising contributions outpacing payments for advertising activities. The negative impact of changes in operating assets and liabilities of $45.3 million primarily related to timing of payments for accounts payable, accrued liabilities and income taxes in the three fiscal quarters of 2024 as compared to the three fiscal quarters of 2023.

 

Investing Activities

Cash used in investing activities was $71.9 million in the three fiscal quarters of 2024, which primarily consisted of $70.8 million of capital expenditures (driven primarily by investments in technological initiatives, supply chain centers and corporate store operations).

 

Financing Activities

Cash used in financing activities was $313.0 million in the three fiscal quarters of 2024, which included the repurchase of approximately $215.0 million in common stock under our Board of Directors-approved share repurchase program, dividend payments of $106.0 million, repayments of long-term debt and finance lease obligations of $16.0 million and tax payments for the vesting of restricted stock of $10.7 million. These uses of cash were partially offset by proceeds from the exercise of stock options of $34.7 million.

 

Critical Accounting Estimates

 

For a description of the Company’s critical accounting estimates, refer to “Part II—Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the 2023 Form 10-K. The Company considers its most significant accounting policies and estimates to be long-lived assets, casualty insurance reserves and income taxes. There have been no material changes to the Company’s critical accounting estimates since December 31, 2023.

24

 

Forward-Looking Statements

 

This filing contains various forward-looking statements about the Company within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Act”) that are based on current management expectations that involve substantial risks and uncertainties which could cause actual results to differ materially from the results expressed in, or implied by, these forward-looking statements. The following cautionary statements are being made pursuant to the provisions of the Act and with the intention of obtaining the benefits of the “safe harbor” provisions of the Act. You can identify forward-looking statements by the use of words such as “anticipates,” “believes,” “could,” “should,” “estimates,” “expects,” “intends,” “may,” “will,” “plans,” “predicts,” “projects,” “seeks,” “approximately,” “potential,” “outlook” and similar terms and phrases that concern our strategy, plans or intentions, including references to assumptions. These forward-looking statements address various matters including information concerning future results of operations and business strategy, our anticipated profitability, estimates in same store sales growth, store growth and the growth of our U.S. and international business in general, our ability to service our indebtedness, our future cash flows, our operating performance, trends in our business and other descriptions of future events reflect the Company’s expectations based upon currently available information and data. While we believe these expectations and projections are based on reasonable assumptions, such forward-looking statements are inherently subject to risks, uncertainties and assumptions. Important factors that could cause actual results to differ materially from our expectations are more fully described under the section headed “Risk Factors” in this filing and in our other filings with the Securities and Exchange Commission, including under the section headed “Risk Factors” in our 2023 Form 10-K for the fiscal year ended December 31, 2023. Actual results may differ materially from those expressed or implied in the forward-looking statements as a result of various factors, including but not limited to: our substantial indebtedness as a result of our recapitalization transactions and our ability to incur additional indebtedness or refinance or renegotiate key terms of that indebtedness in the future; the impact a downgrade in our credit rating may have on our business, financial condition and results of operations; our future financial performance and our ability to pay principal and interest on our indebtedness; the strength of our brand, including our ability to compete in the U.S. and internationally in our intensely competitive industry, including the food service and food delivery markets; our ability to successfully implement our growth strategy, including through our participation in the third-party order aggregation marketplace; labor shortages or changes in operating expenses resulting from increases in prices of food (particularly cheese), fuel and other commodity costs, labor, utilities, insurance, employee benefits and other operating costs or negative economic conditions; the effectiveness of our advertising, operations and promotional initiatives; shortages, interruptions or disruptions in the supply or delivery of fresh food products and store equipment; the impact of social media and other consumer-oriented technologies on our business, brand and reputation; the impact of new or improved technologies and alternative methods of delivery on consumer behavior; new product, digital ordering and concept developments by us, and other food-industry competitors; the additional risks our international operations subject us to; our ability to maintain good relationships with and attract new franchisees, and franchisees’ ability to successfully manage their operations without negatively impacting our royalty payments and fees or our brand’s reputation; our ability to successfully implement cost-saving strategies; our ability and that of our franchisees to successfully operate in the current and future credit environment; changes in the level of consumer spending given general economic conditions, including interest rates, energy prices and consumer confidence or negative economic conditions in general; our ability and that of our franchisees to open new restaurants and keep existing restaurants in operation and maintain demand for new stores; the impact that widespread illness, health epidemics or general health concerns, severe weather conditions and natural disasters may have on our business and the economies of the countries where we operate; changes in foreign currency exchange rates; changes in income tax rates; our ability to retain or replace our executive officers and other key members of management and our ability to adequately staff our stores and supply chain centers with qualified personnel; our ability to find and/or retain suitable real estate for our stores and supply chain centers; changes in government legislation and regulations, including changes in laws and regulations regarding information privacy, payment methods, advertising and consumer protection and social media; adverse legal judgments or settlements; food-borne illness or contamination of products or food tampering or other events that may impact our reputation; data breaches, power loss, technological failures, user error or other cyber risks threatening us or our franchisees; the impact that environmental, social and governance matters may have on our business and reputation; the effect of war, terrorism, catastrophic events, other geopolitical or reputational considerations or climate change; our ability to pay dividends and repurchase shares; changes in consumer tastes, spending and traffic patterns and demographic trends; changes in accounting policies; and adequacy of our insurance coverage. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this filing might not occur. All forward-looking statements speak only as of the date of this filing and should be evaluated with an understanding of their inherent uncertainty. Except as required under federal securities laws and the rules and regulations of the Securities and Exchange Commission, or other applicable law, we will not undertake, and specifically disclaim, any obligation to publicly update or revise any forward-looking statements to reflect events or circumstances arising after the date of this filing, whether as a result of new information, future events or otherwise. You are cautioned not to place undue reliance on the forward-looking statements included in this filing or that may be made elsewhere from time to time by, or on behalf of, us. All forward-looking statements attributable to us are expressly qualified by these cautionary statements.

25

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Market Risk

 

We do not engage in speculative transactions, nor do we hold or issue financial instruments for trading purposes. In connection with the recapitalizations of our business, we have issued fixed rate notes and entered into variable funding notes, and, at September 8, 2024, we are exposed to interest rate risk on borrowings under our variable funding notes. As of September 8, 2024, we had no outstanding borrowings under our 2022 and 2021 Variable Funding Notes.

 

Our 2022 and 2021 Variable Funding Notes bear interest at fluctuating interest rates based on the Secured Overnight Financing Rate (“Term SOFR”), plus a spread adjustment. Accordingly, a rising interest rate environment could result in higher interest expense due on borrowings under our 2022 and 2021 Variable Funding Notes, in which event we may have difficulties making interest payments and funding our other fixed costs, and our available cash flow for general corporate requirements may be adversely affected.

 

Our fixed-rate debt exposes the Company to changes in market interest rates reflected in the fair value of the debt and to the risk that the Company may need to refinance maturing debt with new debt at a higher rate.

 

We are exposed to market risks from changes in commodity prices. During the normal course of business, we purchase cheese and certain other food, cardboard and paper products that are affected by changes in commodity prices and, as a result, we are subject to volatility in our product costs. Severe increases in commodity prices or food costs, including as a result of inflation, could affect the global and U.S. economies and could also adversely impact our business, financial condition or results of operations. We may periodically enter into financial instruments to manage this risk, although we have not done so historically. We do not engage in speculative transactions or hold or issue financial instruments for trading purposes. In instances when we use fixed pricing agreements with our suppliers, these agreements cover our physical commodity needs, are not net-settled and are accounted for as normal purchases.

 

Foreign Currency Exchange Risk

 

We have exposure to various foreign currency exchange rate fluctuations for revenues generated by our operations outside the U.S., which can adversely impact our net income and cash flows. Approximately 6.9% of our total revenues in the third quarter of 2024, approximately 6.8% of our total revenues in the three fiscal quarters of 2024, approximately 7.1% of our total revenues in the third quarter of 2023, and approximately 6.9% of our total revenues in the three fiscal quarters of 2023 were derived from our international franchise segment, a majority of which were denominated in foreign currencies. We also operate dough manufacturing and distribution facilities in Canada, which generate revenues denominated in Canadian dollars. We do not enter into financial instruments to manage this foreign currency exchange risk. We estimate that a hypothetical 10% adverse change in the foreign currency rates for our international markets would have resulted in a negative impact on royalty revenues of approximately $19.5 million in the three fiscal quarters of 2024.

Item 4. Controls and Procedures.

 

Management, with the participation of the Company’s Chief Executive Officer, Russell J. Weiner, and Executive Vice President and Chief Financial Officer, Sandeep Reddy, performed an evaluation of the effectiveness of the Company’s disclosure controls and procedures (as that term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. Based on that evaluation, Mr. Weiner and Mr. Reddy concluded that the Company’s disclosure controls and procedures were effective.

 

During the quarterly period ended September 8, 2024, there were no changes in the Company’s internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) that have materially affected or are reasonably likely to materially affect the Company’s internal control over financial reporting.

26

 

PART II. OTHER INFORMATION

 

We are a party to lawsuits, revenue agent reviews by taxing authorities and administrative proceedings in the ordinary course of business which include, without limitation, workers’ compensation, general liability, automobile and franchisee claims. We are also subject to suits related to employment practices. In addition, we may occasionally be party to large claims, including class action suits.

 

Litigation is subject to many uncertainties, and the outcome of individual litigated matters is unpredictable. These matters referenced above could be decided unfavorably to us and could require us to pay damages or make other expenditures in amounts or a range of amounts that cannot be estimated with accuracy. However, we do not believe these matters, individually or in the aggregate, will have a material adverse effect on the business or financial condition of the Company, and we expect that the established accruals adequately provide for the estimated resolution of such claims.

 

Item 1A. Risk Factors.

 

There have been no material changes with respect to those risk factors previously disclosed in Item 1A “Risk Factors” in Part I of our 2023 Form 10-K.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

c. Purchases of Equity Securities by the Issuer and Affiliated Purchasers.

 

 

 

 

 

 

 

 

 

 

 

 

 

Maximum
Approximate Dollar

 

 

 

 

 

 

 

 

 

Total Number of Shares

 

 

Value of Shares that

 

 

 

Total Number

 

 

 

 

 

Purchased as Part of

 

 

May Yet Be Purchased

 

 

 

of Shares

 

 

Average Price Paid

 

 

Publicly Announced

 

 

Under the Program (2)

 

Period

 

Purchased (1)

 

 

Per Share

 

 

Program (2)

 

 

(in thousands)

 

Period #7 (June 17, 2024
   to July 14, 2024)

 

 

854

 

 

$

502.03

 

 

 

—

 

 

$

1,116,333

 

Period #8 (July 15, 2024
   to August 11, 2024)

 

 

317,447

 

 

 

426.06

 

 

 

315,604

 

 

 

981,859

 

Period #9 (August 12, 2024
   to September 8, 2024)

 

 

129,076

 

 

 

434.52

 

 

 

127,698

 

 

 

926,333

 

Total

 

 

447,377

 

 

$

428.65

 

 

 

443,302

 

 

$

926,333

 

 

(1)

4,075 shares in the third quarter of 2024 were purchased as part of the Company’s employee stock payroll deduction plan at an average price of $433.79.

 

(2)

On February 21, 2024, the Company’s Board of Directors authorized an additional share repurchase program to repurchase up to $1.0 billion of the Company’s common stock in addition to the $141.3 million that was previously remaining for a total authorization of $1.14 billion for future share repurchases as of that date. As of September 8, 2024, $926.3 million remained available for future purchases of the Company’s common stock under this share repurchase program.

 

 

Authorization for the repurchase program may be modified, suspended, or discontinued at any time. The repurchase of shares in any particular period and the actual amount of such purchases remain at the discretion of the Board of Directors, and no assurance can be given that shares will be repurchased in the future.

 

Item 3. Defaults Upon Senior Securities.

None.

 

Item 4. Mine Safety Disclosures.

Not applicable.

27

 

Item 5. Other Information.

Rule 10b5-1 Trading Plans

Our directors and officers (as defined in Section 16 of the Exchange Act (“Section 16”)) may from time to time enter into plans for the purchase or sale of Domino’s stock that are intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act.

 

During the fiscal quarter ended September 8, 2024, the following Section 16 officer adopted a “Rule 10b5-1 trading arrangement” (as defined in Item 408 under Regulation S-K of the Exchange Act):

•
Cynthia A. Headen, our Executive Vice President, Chief Supply Chain Officer, adopted a new Rule 10b5-1 trading arrangement on August 1, 2024. The plan’s maximum duration is until August 29, 2025, and first trades will not occur until November 1, 2024 at the earliest. The trading plan, which is subject to certain conditions, is intended to permit Ms. Headen to sell from time to time an aggregate of up to 2,510 shares of our common stock, the actual amount of which may be less based on tax withholdings and performance and vesting conditions of performance-based stock units and restricted stock units.

 

The Rule 10b5-1 trading arrangement described above was adopted and precleared in accordance with Domino’s Insider Trading Policy and actual sale transactions made pursuant to such trading arrangement will be disclosed publicly in future Section 16 filings with the SEC.

 

No other directors or officers adopted, modified and/or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” as defined in Item 408 under Regulation S-K of the Exchange Act, during the last fiscal quarter.

28

 

Item 6. Exhibits.

 

Exhibit

Number

 

Description

10.1

 

Eighth Supplement dated as of July 23, 2024 to the Amended and Restated Base Indenture dated as of March 15, 2012 by and among Domino’s Pizza Master Issuer LLC, Domino’s SPV Canadian Holding Company Inc., Domino’s Pizza Distribution LLC and Domino’s IP Holder LLC, each as Co-Issuer, and Citibank, N.A., as Trustee and Securities Intermediary.

31.1

 

Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, relating to Domino’s Pizza, Inc.

31.2

 

Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, relating to Domino’s Pizza, Inc.

32.1

 

Certification of Chief Executive Officer pursuant to Section 1350, Chapter 63 of Title 18, United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, relating to Domino’s Pizza, Inc.

32.2

 

Certification of Chief Financial Officer pursuant to Section 1350, Chapter 63 of Title 18, United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, relating to Domino’s Pizza, Inc.

101.INS

 

XBRL Instance Document – The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH

 

Inline XBRL Taxonomy Extension Schema Document.

101.CAL

 

Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.LAB

 

Inline XBRL Taxonomy Extension Label Linkbase Document.

101.PRE

 

Inline XBRL Taxonomy Extension Presentation Linkbase Document.

101.DEF

 

Inline XBRL Taxonomy Extension Definition Linkbase Document.

104

 

Cover page Interactive Data File (formatted as Inline XBRL and contained in exhibit 101).

 

29

 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

DOMINO’S PIZZA, INC.

(Registrant)

Date: October 10, 2024

 

/s/ Sandeep Reddy

Sandeep Reddy

 

Executive Vice President, Chief Financial Officer

(Principal Financial Officer)

 

30

Exhibit 10.1

Execution Version

 

DOMINO’S PIZZA MASTER ISSUER LLC,
DOMINO’S PIZZA DISTRIBUTION LLC,
DOMINO’S IP HOLDER LLC and
DOMINO’S SPV CANADIAN HOLDING COMPANY INC.
each as a Co-Issuer

and

CITIBANK, N.A.,
as Trustee and Securities Intermediary

 

EIGHTH SUPPLEMENT
Dated as of July 23, 2024
to the
AMENDED AND RESTATED BASE INDENTURE
Dated as of March 15, 2012

 

Asset Backed Notes
(Issuable in Series)

 

 

EIGHTH SUPPLEMENT TO AMENDED AND RESTATED BASE INDENTURE

EIGHTH SUPPLEMENT, dated as of July 23, 2024 (this “Eighth Supplement”), to the Amended and Restated Base Indenture, dated as of March 15, 2012, is by and among DOMINO'S PIZZA MASTER ISSUER LLC, a Delaware limited liability company (the "Master Issuer"), DOMINO'S PIZZA DISTRIBUTION LLC, a Delaware limited liability company (the "Domestic Distributor"), DOMINO'S SPV CANADIAN HOLDING COMPANY INC., a Delaware corporation (the "SPV Canadian Holdco"), DOMINO'S IP HOLDER LLC, a Delaware limited liability company (the "IP Holder" and together with the Master Issuer, the Domestic Distributor and the SPV Canadian Holdco, collectively, the "Co-Issuers" and each, a "Co-Issuer"), and CITIBANK, N.A., a national banking association, as trustee (in such capacity, the "Trustee"), and as securities intermediary (in such capacity, the “Securities Intermediary”).

PRELIMINARY STATEMENT

WHEREAS, the Co-Issuers and the Trustee entered into the Amended and Restated Base Indenture (as amended by the First Supplement to Amended and Restated Base Indenture, dated as of September 16, 2013, the Second Supplement to Amended and Restated Base Indenture, dated as of October 21, 2015, the Third Supplement to Amended and Restated Base Indenture, dated as of October 21, 2015, the Fourth Supplement to Amended and Restated Base Indenture, dated as of July 24, 2017, the Fifth Supplement to Amended and Restated Base Indenture, dated as of November 21, 2018, the Sixth Supplement to Amended and Restated Base Indenture, dated as of April 16, 2021 and the Seventh Supplement to Amended and Restated Base Indenture, dated as of December 30, 2021, and as further amended, modified or supplemented prior to the date hereof, the "Base Indenture");

WHEREAS, on or about October 26, 2023, Domino’s RE LLC (the “Domestic Distribution Real Estate Holder”) sold a Manufacturing and Distribution Center (the “Specified Disposition”) located in Ontario, California for $14,897,816.00 in cash consideration;

WHEREAS, the Specified Disposition constitutes a Real Estate Disposition within the meaning of the Base Indenture;

WHEREAS, Section 8.16(d) of the Base Indenture requires that all Asset Disposition Proceeds received by the Domestic Distribution Real Estate Holder from any Real Estate Disposition must be either (x) reinvested in real property held by the Domestic Distribution Real Estate Holder and used for production or distribution purposes within 365 days of the disposition giving rise to such proceeds or (y) used to prepay the Notes;

WHEREAS, the Securitization Entities wish to invest the Asset Disposition Proceeds resulting from the Specified Disposition in assets that are useful to the business of the Securitization Entities but do not constitute real property held by the Domestic Distribution Real Estate Holder;

WHEREAS, Section 13.2(a) of the Base Indenture provides, among other things, that the Co-Issuers and the Trustee, with the consent of the Control Party (at the direction of the Controlling Class Representative, if applicable), may at any time, and from time to time, make amendments, waivers and other modifications to the Base Indenture;

-2-

 

 

WHEREAS, the Co-Issuers have duly authorized the execution and delivery of this Eighth Supplement;

WHEREAS, there is currently no Controlling Class Representative, and the Control Party is willing to provide its written consent (in accordance with the terms and conditions of the Base Indenture) to the execution of this Eighth Supplement and;

 

WHEREAS, the Co-Issuers and the Trustee wish to amend the Base Indenture as set forth herein.

NOW, THEREFORE, in consideration of the provisions, covenants and the mutual agreements herein contained, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS

Unless otherwise defined herein, all capitalized terms used herein (including in the preamble and the recitals hereto) shall have the meanings assigned to such terms in the Base Indenture Definitions List attached to the Base Indenture as Annex A thereto (the “Base Indenture Definitions List”).

ARTICLE II

AMENDMENTS
Section 2.1.
The Base Indenture Definitions List is hereby amended by inserting the following definitions in the Base Indenture Definitions List in accordance with alphabetical order:

““Eighth Supplement” means the Eighth Supplement to the Base Indenture, dated as of July 23, 2024, among the Co-Issuers, the Trustee and the Securities Intermediary.”

““Eighth Supplement Effective Date” means the “Effective Date” as defined in the Eighth Supplement.”

““Specified Real Estate Disposition” means the disposition of the Manufacturing and Distribution Center located in Ontario, California on or about October 26, 2023.”

Section 2.2.
Section 8.16(d) of the Base Indenture is hereby amended by inserting the following underlined text:

“(d) any Real Estate Disposition; provided that all Asset Disposition Proceeds received by the Domestic Distribution Real Estate Holder from any Real Estate Disposition will either (i) (x) in the case of the Specified Real Estate Disposition, be reinvested within 365 days of such disposition in assets constituting Collateral that are used or useful to the Securitization Entities in the operation of their business or their other assets, including without limitation capital expenditures, leasehold improvements and/or expansion and relocation projects, and including, for the avoidance of doubt, any such investments made during the period from and including October 26, 2023 to and including the

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Eighth Supplement Effective Date, and (y) in the case of any other Real Estate Disposition, be reinvested in real property held by the Domestic Distribution Real Estate Holder and used for production or distribution purposes or in such other assets as the Control Party may agree in writing, in each case within 365 days of the disposition giving rise to such proceeds or (ii) used to prepay the Notes;”

ARTICLE III

GENERAL
Section 3.1.
Conditions to Effectiveness. The provisions of this Eighth Supplement shall be effective upon the date (the “Effective Date”) that the following conditions are satisfied:
(a)
this instrument has been executed and delivered by the parties hereto, with the consent of the Control Party; and
(b)
the Co-Issuers have delivered to the Trustee and the Control Party the Opinion of Counsel and Officer's Certificate described in Sections 13.3 and 14.3 of the Base Indenture.
Section 3.2.
Effect on Base Indenture. Subject to the satisfaction of the conditions precedent set forth in Section 3.1, upon the date hereof (i) the Base Indenture shall be amended in accordance herewith, (ii) this Eighth Supplement shall form part of the Base Indenture for all purposes and (iii) the parties and each Noteholder shall be bound by the Base Indenture, as so amended. Except as expressly set forth or contemplated in this Eighth Supplement, the terms and conditions of the Base Indenture shall remain in place and shall not be altered, amended or changed in any manner whatsoever, except by any further amendment to the Base Indenture made in accordance with the terms of the Base Indenture, as amended by this Eighth Supplement.
Section 3.3.
Binding Effect. This Eighth Supplement shall inure to the benefit of and be binding on the respective successors and assigns of the parties hereto, each Noteholder and each other Secured Party.
Section 3.4.
Counterparts. This Eighth Supplement may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all of such counterparts shall together constitute but one and the same instrument.
Section 3.5.
Governing Law. THIS EIGHTH SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
Section 3.6.
Electronic Signatures and Transmission. For purposes of this Supplement, any reference to “written” or “in writing” means any form of written communication, including, without limitation, electronic signatures, and any such written communication may be transmitted by Electronic Transmission. “Electronic Transmission” means any form of communication not directly involving the physical transmission of paper, including the use of, or participation in, one or more electronic networks or databases (including one or more distributed electronic networks or databases), that creates a record that may be retained, retrieved and reviewed by a recipient thereof and that may be directly reproduced in paper form by such a recipient through an automated

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process. The Trustee is authorized to accept written instructions, directions, reports, notices or other communications delivered by Electronic Transmission and shall not have any duty or obligation to verify or confirm that the Person sending instructions, directions, reports, notices or other communications or information by Electronic Transmission is, in fact, a Person authorized to give such instructions, directions, reports, notices or other communications or information on behalf of the party purporting to send such Electronic Transmission, and the Trustee shall not have any liability for any losses, liabilities, costs or expenses incurred or sustained by any party as a result of such reliance upon or compliance with such instructions, directions, reports, notices or other communications or information to the Trustee, including, without limitation, the risk of the Trustee acting on unauthorized instructions, notices, reports or other communications or information, and the risk of interception and misuse by third parties (except to the extent such action results from gross negligence, willful misconduct or fraud by the Trustee). Any requirement in the Indenture that a document is to be signed or authenticated by “manual signature” or similar language shall not be deemed to prohibit signature to be by facsimile or electronic signature and shall not be deemed to prohibit delivery thereof by Electronic Transmission. Notwithstanding anything to the contrary in this Supplement, any and all communications (both text and attachments) by or from the Trustee that the Trustee in its sole discretion deems to contain confidential, proprietary and/or sensitive information and sent by Electronic Transmission will be encrypted. The recipient of the Electronic Transmission will be required to complete a one-time registration process.
Section 3.7.
Amendments. This Eighth Supplement may not be modified or amended except in accordance with the terms of the Base Indenture.
Section 3.8.
Trustee and Securities Intermediary. The Trustee and the Securities Intermediary assume no responsibility for the correctness of the recitals contained herein, which shall be taken as the statements of the Master Issuer and neither the Trustee nor the Securities Intermediary shall be responsible or accountable in any way whatsoever for or with respect to the validity, execution or sufficiency of this Eighth Supplement and makes no representation with respect thereto. In entering into this Eighth Supplement, the Trustee and the Securities Intermediary shall be entitled to the benefit of every provision of the Base Indenture relating to the conduct of or affecting the liability of or affording protection to the Trustee or the Securities Intermediary.
ARTICLE IV

REPRESENTATIONS AND WARRANTIES

Each party hereto represents and warrants to each other party hereto that this Eighth Supplement has been duly and validly executed and delivered by such party and constitutes its legal, valid and binding obligation, enforceable against such party in accordance with its terms.

[Remainder of Page Intentionally Left Blank]

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IN WITNESS WHEREOF, each of the Co-Issuers and the Trustee have caused this Eighth Supplement to be executed and delivered by its respective duly authorized officer as of the day and year first written above.

DOMINO’S MASTER ISSUER LLC, as Co-Issuer


By: /s/ Jessica Parrish
Name: Jessica Parrish
Title: Vice President, Chief Accounting Officer and Treasurer

DOMINO’S PIZZA DISTRIBUTION LLC, as Co-Issuer


By: /s/ Jessica Parrish
Name: Jessica Parrish
Title: Vice President, Chief Accounting Officer and Treasurer

DOMINO’S SPV CANADIAN HOLDING COMPANY INC., as Co-Issuer


By: /s/ Jessica Parrish
Name: Jessica Parrish
Title: Vice President, Chief Accounting Officer and Treasurer

DOMINO’S IP HOLDER LLC, as Co-Issuer


By: /s/ Jessica Parrish
Name: Jessica Parrish
Title: Vice President, Chief Accounting Officer and Treasurer

CITIBANK, N.A., in its capacity as Trustee and Securities Intermediary


By: /s/ Trang Tran-Rojas
Name: Trang Tran-Rojas
Title: Senior Trust Officer

[Signature Page to Eighth Supplement]

 

CONSENT OF CONTROL PARTY:

In accordance with Section 2.4 of the Servicing Agreement,

Midland Loan Services, a division of PNC Bank, National

Association, as Control Party, hereby consents to the execution and delivery by the Co-Issuers and the Trustee of this Eighth Supplement to the Amended and Restated Base Indenture.

 

MIDLAND LOAN SERVICES,
A DIVISION OF PNC BANK, NATIONAL ASSOCIATION


By: /s/ David Bornheimer
Name: David Bornheimer
Title:

 

[Signature Page to Eighth Supplement]

Exhibit 31.1

 

 

CERTIFICATION OF CHIEF EXECUTIVE OFFICER OF DOMINO’S PIZZA, INC.

 

 

I, Russell J. Weiner, certify that:

 

1.
I have reviewed this quarterly report on Form 10-Q of Domino’s Pizza, Inc.;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

 

October 10, 2024

 

/s/ Russell J. Weiner

Date

 

Russell J. Weiner

 

 

Chief Executive Officer

 

 

Exhibit 31.2

 

 

CERTIFICATION OF CHIEF FINANCIAL OFFICER OF DOMINO’S PIZZA, INC.

 

 

I, Sandeep Reddy, certify that:

 

1.
I have reviewed this quarterly report on Form 10-Q of Domino’s Pizza, Inc.;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

October 10, 2024

 

/s/ Sandeep Reddy

Date

 

Sandeep Reddy

 

 

Chief Financial Officer

 

 

Exhibit 32.1

 

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

 

In connection with the Quarterly Report of Domino’s Pizza, Inc. (the “Company”) on Form 10-Q for the period ended September 8, 2024, as filed with the Securities and Exchange Commission (the “Report”), I, Russell J. Weiner, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that based on my knowledge:

 

 

1)
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

 

2)
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

 

 

/s/ Russell J. Weiner

Russell J. Weiner

Chief Executive Officer

 

 

 

 

Dated: October 10, 2024

 

 

 

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Domino’s Pizza, Inc. and will be retained by Domino’s Pizza, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

 

 

 

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

 

In connection with the Quarterly Report of Domino’s Pizza, Inc. (the “Company”) on Form 10-Q for the period ended September 8, 2024, as filed with the Securities and Exchange Commission (the “Report”), I, Sandeep Reddy, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that based on my knowledge:

 

 

1)
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

 

2)
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

 

 

/s/ Sandeep Reddy

Sandeep Reddy

Chief Financial Officer

 

 

 

 

 

Dated: October 10, 2024

 

 

 

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Domino’s Pizza, Inc. and will be retained by Domino’s Pizza, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

 

 

v3.24.3
Cover Page - shares
 8 Months Ended
Sep. 08, 2024
Oct. 03, 2024
Cover [Abstract]    
Document Type 10-Q  
Entity Interactive Data Current Yes  
Amendment Flag false  
Document Quarterly Report true  
Document Transition Report false  
Entity Central Index Key 0001286681  
Document Fiscal Period Focus Q3  
Document Fiscal Year Focus 2024  
Document Period End Date Sep. 08, 2024  
Entity Registrant Name Domino’s Pizza, Inc.  
Securities Act File Number 001-32242  
Current Fiscal Year End Date --12-31  
Entity Tax Identification Number 38-2511577  
Entity Incorporation, State or Country Code DE  
Entity Current Reporting Status Yes  
Entity Shell Company false  
Entity Filer Category Large Accelerated Filer  
Entity Small Business false  
Entity Emerging Growth Company false  
Entity Address, Address Line One 30 Frank Lloyd Wright Drive  
Entity Address, City or Town Ann Arbor  
Entity Address, State or Province MI  
Entity Address, Postal Zip Code 48105  
City Area Code 734  
Local Phone Number 930-3030  
Trading Symbol DPZ  
Security Exchange Name NYSE  
Title of 12(b) Security Common Stock  
Entity Common Stock, Shares Outstanding   34,531,978
v3.24.3
CONSOLIDATED BALANCE SHEETS - USD ($)
$ in Thousands
Sep. 08, 2024
Dec. 31, 2023
 [1]
Current assets:    
Cash and cash equivalents $ 189,084 $ 114,098
Restricted cash and cash equivalents 185,439 200,870
Accounts receivable, net 278,707 282,809
Inventories 69,168 82,964
Prepaid expenses and other 38,725 30,215
Advertising fund assets, restricted 111,134 106,335
Total current assets 872,257 817,291
Property, plant and equipment:    
Land and buildings 105,018 108,791
Leasehold and other improvements 185,915 176,817
Equipment 389,488 364,620
Construction in progress 13,588 24,505
Property, plant and equipment, Gross 694,009 674,733
Accumulated depreciation and amortization (400,602) (370,368)
Property, plant and equipment, net 293,407 304,365
Other assets:    
Operating lease right-of-use assets 215,040 207,323
Goodwill 11,578 11,688
Capitalized software, net 151,947 134,105
Investment in DPC Dash 162,424 143,553
Deferred income tax assets, net 21,216 13,680
Other assets 47,197 42,894
Total other assets 609,402 553,243
Total assets 1,775,066 1,674,899
Current liabilities:    
Current portion of long-term debt 4,946 56,366
Accounts payable 97,847 106,267
Operating lease liabilities 40,806 39,330
Insurance reserves 27,137 28,135
Dividends payable 54,063 1,514
Advertising fund liabilities 109,219 104,246
Other accrued liabilities 176,490 211,492
Total current liabilities 510,508 547,350
Long-term liabilities:    
Long-term debt, less current portion 4,970,687 4,934,062
Operating lease liabilities 186,981 179,548
Insurance reserves 37,212 38,559
Other accrued liabilities 46,316 45,747
Total long-term liabilities 5,241,196 5,197,916
Stockholders' deficit    
Common stock 345 347
Additional paid-in capital 1,710 2,801
Retained deficit (3,973,816) (4,069,648)
Accumulated other comprehensive loss (4,877) (3,867)
Total stockholders' deficit (3,976,638) (4,070,367)
Total liabilities and stockholders' deficit $ 1,775,066 $ 1,674,899
[1] The condensed consolidated balance sheet at December 31, 2023 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements.
v3.24.3
Condensed Consolidated Statements of Income (Unaudited) - USD ($)
$ in Thousands
 3 Months Ended 8 Months Ended
Sep. 08, 2024
Sep. 10, 2023
Sep. 08, 2024
Sep. 10, 2023
Revenues:        
Revenue $ 1,080,119 $ 1,027,361 $ 3,262,502 $ 3,076,386
Cost of sales:        
Cost of sales 656,372 629,192 1,979,854 1,888,014
Gross margin 423,747 398,169 1,282,648 1,188,372
General and administrative 103,991 97,203 320,962 290,186
U.S. franchise advertising 120,925 111,534 356,181 335,719
Refranchising loss 0 0 158 149
Income from operations 198,831 189,432 605,347 562,318
Other income 26,172 28,231 18,871 13,267
Interest income 4,339 2,707 12,297 7,635
Interest expense (44,726) (44,796) (135,293) (136,275)
Income before provision for income taxes 184,616 175,574 501,222 446,945
Provision for income taxes 37,692 27,898 86,496 85,119
Net income $ 146,924 $ 147,676 $ 414,726 $ 361,826
Earnings per share:        
Common stock - basic $ 4.22 $ 4.22 $ 11.91 $ 10.28
Common stock - diluted $ 4.19 $ 4.18 $ 11.8 $ 10.19
U.S. Stores [Member] | U.S. Company-owned stores [Member]        
Revenues:        
Revenue $ 89,173 $ 86,277 $ 274,086 $ 258,882
Cost of sales:        
Cost of sales 74,205 72,614 226,722 214,609
U.S. Stores [Member] | U.S. franchise stores [Member]        
Revenues:        
Revenue 144,074 138,322 442,168 410,454
U.S. Stores [Member] | U.S. franchise advertising [Member]        
Revenues:        
Revenue 120,925 111,534 356,181 335,719
Supply Chain [Member] | Supply Chain Center [Member]        
Revenues:        
Revenue 651,314 618,086 1,969,772 1,858,023
Cost of sales:        
Cost of sales 582,167 556,578 1,753,132 1,673,405
International Franchise [Member] | International franchise royalties and fees [Member]        
Revenues:        
Revenue $ 74,633 $ 73,142 $ 220,295 $ 213,308
v3.24.3
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($)
$ in Thousands
 3 Months Ended 8 Months Ended
Sep. 08, 2024
Sep. 10, 2023
Sep. 08, 2024
Sep. 10, 2023
Statement of Comprehensive Income [Abstract]        
Net Income (Loss) $ 146,924 $ 147,676 $ 414,726 $ 361,826
Currency translation adjustment 598 (1,330) (1,010) (403)
Comprehensive income $ 147,522 $ 146,346 $ 413,716 $ 361,423
v3.24.3
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
$ in Thousands
 3 Months Ended 8 Months Ended
Sep. 08, 2024
Sep. 10, 2023
Sep. 08, 2024
Sep. 10, 2023
Cash flows from operating activities:        
Net Income (Loss) $ 146,924 $ 147,676 $ 414,726 $ 361,826
Adjustments to reconcile net income to net cash provided by operating activities:        
Depreciation and amortization 20,756 18,268 60,974 54,999
Refranchising loss 0 0 158 149
Loss on sale/disposal of assets 174 145 501 547
Amortization of debt issuance costs     3,685 3,858
Benefit for deferred income taxes     (7,524) (12,191)
Non-cash equity-based compensation expense 9,517 9,442 31,541 26,507
Excess tax benefits from equity-based compensation     (21,609) (2,973)
Provision for losses on accounts and notes receivable     250 1,342
Unrealized loss on investments     (18,871) (13,267)
Changes in operating assets and liabilities     (18,968) 7,682
Changes in advertising fund assets and liabilities, restricted     2,016 (6,349)
Net cash provided by operating activities     446,879 422,130
Cash flows from investing activities:        
Capital expenditures     (70,801) (59,271)
Other     (1,094) (743)
Net cash used in investing activities     (71,895) (60,014)
Cash flows from financing activities:        
Repayments of long-term debt and finance lease obligations     (15,947) (41,349)
Proceeds from exercise of stock options     34,669 5,806
Purchases of common stock     (214,999) (210,847)
Tax payments for restricted stock upon vesting     (10,706) (5,240)
Payments of common stock dividends and equivalents     (106,015) (85,564)
Net cash used in financing activities     (312,998) (337,194)
Effect of exchange rate changes on cash     (589) (304)
Change in cash and cash equivalents, restricted cash and cash equivalents     61,397 24,618
Cash and cash equivalents, beginning of period     114,098 [1] 60,356
Restricted cash and cash equivalents, beginning of period     200,870 [1] 191,289
Cash and cash equivalents included in advertising fund assets, restricted, beginning of period     88,165 143,559
Cash and cash equivalents, restricted cash and cash equivalents and cash and cash equivalents included in advertising fund assets, restricted, beginning of period     403,133 395,204
Cash and cash equivalents, end of period 189,084 80,879 189,084 80,879
Restricted cash and cash equivalents, end of period 185,439 202,307 185,439 202,307
Cash and cash equivalents included in advertising fund assets, restricted, end of period 90,007 136,636 90,007 136,636
Cash and cash equivalents, restricted cash and cash equivalents and cash and cash equivalents included in advertising fund assets, restricted, end of period $ 464,530 $ 419,822 $ 464,530 $ 419,822
[1] The condensed consolidated balance sheet at December 31, 2023 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements.
v3.24.3
Pay vs Performance Disclosure - USD ($)
$ in Thousands
 3 Months Ended 8 Months Ended
Sep. 08, 2024
Sep. 10, 2023
Sep. 08, 2024
Sep. 10, 2023
Pay vs Performance Disclosure        
Net Income (Loss) $ 146,924 $ 147,676 $ 414,726 $ 361,826
v3.24.3
Insider Trading Arrangements
 3 Months Ended
Sep. 08, 2024
shares
Trading Arrangements, by Individual  
Material Terms of Trading Arrangement

Item 5. Other Information.

Rule 10b5-1 Trading Plans

Our directors and officers (as defined in Section 16 of the Exchange Act (“Section 16”)) may from time to time enter into plans for the purchase or sale of Domino’s stock that are intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act.

 

During the fiscal quarter ended September 8, 2024, the following Section 16 officer adopted a “Rule 10b5-1 trading arrangement” (as defined in Item 408 under Regulation S-K of the Exchange Act):

•
Cynthia A. Headen, our Executive Vice President, Chief Supply Chain Officer, adopted a new Rule 10b5-1 trading arrangement on August 1, 2024. The plan’s maximum duration is until August 29, 2025, and first trades will not occur until November 1, 2024 at the earliest. The trading plan, which is subject to certain conditions, is intended to permit Ms. Headen to sell from time to time an aggregate of up to 2,510 shares of our common stock, the actual amount of which may be less based on tax withholdings and performance and vesting conditions of performance-based stock units and restricted stock units.

 

The Rule 10b5-1 trading arrangement described above was adopted and precleared in accordance with Domino’s Insider Trading Policy and actual sale transactions made pursuant to such trading arrangement will be disclosed publicly in future Section 16 filings with the SEC.

 

No other directors or officers adopted, modified and/or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” as defined in Item 408 under Regulation S-K of the Exchange Act, during the last fiscal quarter.
Rule 10b5-1 Arrangement Adopted false
Non-Rule 10b5-1 Arrangement Adopted false
Rule 10b5-1 Arrangement Terminated false
Non-Rule 10b5-1 Arrangement Terminated false
Rule 10b5-1 Arrangement Modified false
Non-Rule 10b5-1 Arrangement Modified false
Cynthia A. Headen [Member]  
Trading Arrangements, by Individual  
Name Cynthia A. Headen
Title Executive Vice President, Chief Supply Chain Officer
Rule 10b5-1 Arrangement Adopted true
Adoption Date August 1, 2024
Expiration Date August 29, 2025
Aggregate Available 2,510
v3.24.3
Basis of Presentation
 8 Months Ended
Sep. 08, 2024
Accounting Policies [Abstract]  
Basis of Presentation

1. Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. For further information, refer to the consolidated financial statements and footnotes for the fiscal year ended December 31, 2023 included in the Company’s 2023 Annual Report on Form 10-K, filed with the Securities and Exchange Commission on February 26, 2024 (the “2023 Form 10-K”).

In the opinion of management, all adjustments, consisting of normal recurring items, considered necessary for a fair statement have been included. Operating results for the fiscal quarter and three fiscal quarters ended September 8, 2024 are not necessarily indicative of the results that may be expected for the fiscal year ending December 29, 2024.
v3.24.3
Segment Information
 8 Months Ended
Sep. 08, 2024
Segment Reporting [Abstract]  
Segment Information

2. Segment Information

 

The tables below summarize the financial information concerning the Company’s reportable segments for the third quarter and three fiscal quarters of 2024 and the third quarter and three fiscal quarters of 2023. Intersegment revenues are comprised of sales of food, equipment and supplies from the supply chain segment to the Company-owned stores in the U.S. stores segment. Intersegment sales prices are market based. The “Other” column as it relates to Segment Income below primarily includes corporate administrative costs that are not allocable to a reportable segment, including labor, computer expenses, professional fees, travel and entertainment, rent, insurance and other corporate administrative costs.

 

 

 

Fiscal Quarters Ended September 8, 2024 and September 10, 2023

 

 

 

U.S.

 

 

Supply

 

 

International

 

 

Intersegment

 

 

 

 

 

 

 

 

 

Stores

 

 

Chain

 

 

Franchise

 

 

Revenues

 

 

Other

 

 

Total

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2024

 

$

354,172

 

 

$

679,664

 

 

$

74,633

 

 

$

(28,350

)

 

$

—

 

 

$

1,080,119

 

2023

 

 

336,133

 

 

 

643,728

 

 

 

73,142

 

 

 

(25,642

)

 

 

—

 

 

 

1,027,361

 

Segment Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2024

 

$

128,577

 

 

$

61,173

 

 

$

62,367

 

 

N/A

 

 

$

(22,839

)

 

$

229,278

 

2023

 

 

120,351

 

 

 

55,250

 

 

 

61,495

 

 

N/A

 

 

 

(19,809

)

 

 

217,287

 

 

 

 

Three Fiscal Quarters Ended September 8, 2024 and September 10, 2023

 

 

 

U.S.

 

 

Supply

 

 

International

 

 

Intersegment

 

 

 

 

 

 

 

 

 

Stores

 

 

Chain

 

 

Franchise

 

 

Revenues

 

 

Other

 

 

Total

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2024

 

$

1,072,435

 

 

$

2,053,055

 

 

$

220,295

 

 

$

(83,283

)

 

$

—

 

 

$

3,262,502

 

2023

 

 

1,005,055

 

 

 

1,935,332

 

 

 

213,308

 

 

 

(77,309

)

 

 

—

 

 

 

3,076,386

 

Segment Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2024

 

$

394,167

 

 

$

190,736

 

 

$

180,796

 

 

N/A

 

 

$

(67,178

)

 

$

698,521

 

2023

 

 

356,626

 

 

 

163,791

 

 

 

178,499

 

 

N/A

 

 

 

(54,396

)

 

 

644,520

 

 

The following table reconciles total Segment Income to consolidated income before provision for income taxes.

 

 

 

Fiscal Quarter Ended

 

 

Three Fiscal Quarters Ended

 

 

 

September 8,

 

 

September 10,

 

 

September 8,

 

 

September 10,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Total Segment Income

 

$

229,278

 

 

$

217,287

 

 

$

698,521

 

 

$

644,520

 

Depreciation and amortization

 

 

(20,756

)

 

 

(18,268

)

 

 

(60,974

)

 

 

(54,999

)

Refranchising loss

 

 

—

 

 

 

—

 

 

 

(158

)

 

 

(149

)

Loss on sale/disposal of assets

 

 

(174

)

 

 

(145

)

 

 

(501

)

 

 

(547

)

Non-cash equity-based compensation expense

 

 

(9,517

)

 

 

(9,442

)

 

 

(31,541

)

 

 

(26,507

)

Income from operations

 

 

198,831

 

 

 

189,432

 

 

 

605,347

 

 

 

562,318

 

Other income

 

 

26,172

 

 

 

28,231

 

 

 

18,871

 

 

 

13,267

 

Interest income

 

 

4,339

 

 

 

2,707

 

 

 

12,297

 

 

 

7,635

 

Interest expense

 

 

(44,726

)

 

 

(44,796

)

 

 

(135,293

)

 

 

(136,275

)

Income before provision for income taxes

 

$

184,616

 

 

$

175,574

 

 

$

501,222

 

 

$

446,945

 
v3.24.3
Earnings Per Share
 8 Months Ended
Sep. 08, 2024
Earnings Per Share [Abstract]  
Earnings Per Share

3. Earnings Per Share

 

 

 

Fiscal Quarter Ended

 

 

Three Fiscal Quarters Ended

 

 

 

September 8,

 

 

September 10,

 

 

September 8,

 

 

September 10,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Net income available to common stockholders - basic and diluted

 

$

146,924

 

 

$

147,676

 

 

$

414,726

 

 

$

361,826

 

Basic weighted average number of shares

 

 

34,801,086

 

 

 

35,030,660

 

 

 

34,835,394

 

 

 

35,207,117

 

Earnings per share – basic

 

$

4.22

 

 

$

4.22

 

 

$

11.91

 

 

$

10.28

 

Diluted weighted average number of shares

 

 

35,039,408

 

 

 

35,357,043

 

 

 

35,145,732

 

 

 

35,516,434

 

Earnings per share – diluted

 

$

4.19

 

 

$

4.18

 

 

$

11.80

 

 

$

10.19

 

 

The denominators used in calculating diluted earnings per share for common stock for the fiscal quarters and three fiscal quarters each ended September 8, 2024 and September 10, 2023 do not include the following because the effect of including these shares would be anti-dilutive or because the performance targets for these awards had not yet been met:

 

 

 

Fiscal Quarter Ended

 

 

Three Fiscal Quarters Ended

 

 

 

September 8,

 

 

September 10,

 

 

September 8,

 

 

September 10,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Anti-dilutive shares underlying stock-based awards

 

 

 

 

 

 

 

 

 

 

 

 

   Stock options

 

 

44,342

 

 

 

207,218

 

 

 

46,290

 

 

 

228,747

 

   Restricted stock awards and units

 

 

4,223

 

 

 

526

 

 

 

4,223

 

 

 

27,615

 

Performance condition not met

 

 

 

 

 

 

 

 

 

 

 

 

   Restricted stock awards and units

 

 

49,742

 

 

 

59,622

 

 

 

49,742

 

 

 

59,622

 
v3.24.3
Stockholders' Deficit
 8 Months Ended
Sep. 08, 2024
Federal Home Loan Banks [Abstract]  
Stockholders' Deficit

4. Stockholders’ Deficit

The following table summarizes the changes in stockholders’ deficit for the third quarter of 2024.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

Other

 

 

 

Common Stock

 

 

Paid-in

 

 

Retained

 

 

Comprehensive

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Loss

 

Balance at June 16, 2024

 

 

34,956,623

 

 

$

350

 

 

$

30,008

 

 

$

(3,916,008

)

 

$

(5,475

)

Net income

 

 

—

 

 

 

—

 

 

 

—

 

 

 

146,924

 

 

 

—

 

Dividends declared on common stock and equivalents
($1.51 per share)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(52,502

)

 

 

—

 

Issuance and cancellation of stock awards, net

 

 

3,466

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Tax payments for restricted stock upon vesting

 

 

(3,029

)

 

 

(1

)

 

 

(1,445

)

 

 

—

 

 

 

—

 

Purchases of common stock

 

 

(443,302

)

 

 

(4

)

 

 

(39,572

)

 

 

(152,230

)

 

 

—

 

Exercise of stock options

 

 

16,612

 

 

 

—

 

 

 

3,202

 

 

 

—

 

 

 

—

 

Non-cash equity-based compensation expense

 

 

—

 

 

 

—

 

 

 

9,517

 

 

 

—

 

 

 

—

 

Currency translation adjustment

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

598

 

Balance at September 8, 2024

 

 

34,530,370

 

 

$

345

 

 

$

1,710

 

 

$

(3,973,816

)

 

$

(4,877

)

The following table summarizes the changes in stockholders’ deficit for the three fiscal quarters of 2024.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

Other

 

 

 

Common Stock

 

 

Paid-in

 

 

Retained

 

 

Comprehensive

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Loss

 

Balance at December 31, 2023

 

 

34,726,182

 

 

$

347

 

 

$

2,801

 

 

$

(4,069,648

)

 

$

(3,867

)

Net income

 

 

—

 

 

 

—

 

 

 

—

 

 

 

414,726

 

 

 

—

 

Dividends declared on common stock and equivalents
($4.53 per share)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(158,565

)

 

 

—

 

Issuance and cancellation of stock awards, net

 

 

65,135

 

 

 

1

 

 

 

—

 

 

 

—

 

 

 

—

 

Tax payments for restricted stock upon vesting

 

 

(23,417

)

 

 

(1

)

 

 

(10,705

)

 

 

—

 

 

 

—

 

Purchases of common stock

 

 

(499,674

)

 

 

(5

)

 

 

(56,593

)

 

 

(160,329

)

 

 

—

 

Exercise of stock options

 

 

262,144

 

 

 

3

 

 

 

34,666

 

 

 

—

 

 

 

—

 

Non-cash equity-based compensation expense

 

 

—

 

 

 

—

 

 

 

31,541

 

 

 

—

 

 

 

—

 

Currency translation adjustment

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(1,010

)

Balance at September 8, 2024

 

 

34,530,370

 

 

$

345

 

 

$

1,710

 

 

$

(3,973,816

)

 

$

(4,877

)

 

Subsequent to the end of the third quarter of 2024, on October 8, 2024, the Company’s Board of Directors declared a $1.51 per share quarterly dividend on its outstanding common stock for shareholders of record as of December 13, 2024 to be paid on December 27, 2024.

 

The following table summarizes the changes in stockholders’ deficit for the third quarter of 2023.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

Other

 

 

 

Common Stock

 

 

Paid-in

 

 

Retained

 

 

Comprehensive

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Loss

 

Balance at June 18, 2023

 

 

35,057,585

 

 

$

351

 

 

$

3,370

 

 

$

(4,166,520

)

 

$

(3,767

)

Net income

 

 

—

 

 

 

—

 

 

 

—

 

 

 

147,676

 

 

 

—

 

Dividends declared on common stock and equivalents
($1.21 per share)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(42,493

)

 

 

—

 

Issuance and cancellation of stock awards, net

 

 

4,142

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Tax payments for restricted stock upon vesting

 

 

(5,932

)

 

 

—

 

 

 

(2,172

)

 

 

—

 

 

 

—

 

Purchases of common stock

 

 

(229,860

)

 

 

(3

)

 

 

(14,435

)

 

 

(76,416

)

 

 

—

 

Exercise of stock options

 

 

53,188

 

 

 

1

 

 

 

4,754

 

 

 

—

 

 

 

—

 

Non-cash equity-based compensation expense

 

 

—

 

 

 

—

 

 

 

9,442

 

 

 

—

 

 

 

—

 

Currency translation adjustment

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(1,330

)

Balance at September 10, 2023

 

 

34,879,123

 

 

$

349

 

 

$

959

 

 

$

(4,137,753

)

 

$

(5,097

)

 

The following table summarizes the changes in stockholders’ deficit for the three fiscal quarters of 2023.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

Other

 

 

 

Common Stock

 

 

Paid-in

 

 

Retained

 

 

Comprehensive

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Loss

 

Balance at January 1, 2023

 

 

35,419,718

 

 

$

354

 

 

$

9,693

 

 

$

(4,194,418

)

 

$

(4,694

)

Net income

 

 

—

 

 

 

—

 

 

 

—

 

 

 

361,826

 

 

 

—

 

Dividends declared on common stock and equivalents
($3.63 per share)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(128,143

)

 

 

—

 

Issuance and cancellation of stock awards, net

 

 

32,715

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Tax payments for restricted stock upon vesting

 

 

(15,601

)

 

 

—

 

 

 

(5,240

)

 

 

—

 

 

 

—

 

Purchases of common stock

 

 

(622,405

)

 

 

(6

)

 

 

(35,806

)

 

 

(177,018

)

 

 

—

 

Exercise of stock options

 

 

64,696

 

 

 

1

 

 

 

5,805

 

 

 

—

 

 

 

—

 

Non-cash equity-based compensation expense

 

 

—

 

 

 

—

 

 

 

26,507

 

 

 

—

 

 

 

—

 

Currency translation adjustment

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(403

)

Balance at September 10, 2023

 

 

34,879,123

 

 

$

349

 

 

$

959

 

 

$

(4,137,753

)

 

$

(5,097

)
v3.24.3
Leverage Ratio
 8 Months Ended
Sep. 08, 2024
Leverage Ratio [Abstract]  
Leverage Ratio

5. Leverage Ratio

In accordance with the Company’s debt agreements, the payment of principal on the outstanding senior notes may be suspended if the Holdco Leverage Ratio is less than or equal to 5.0x total debt to adjusted EBITDA, as defined in the related agreements, and no catch-up provisions are applicable. As of the end of the first, second and third quarters of 2024, the Company had a Holdco Leverage Ratio of less than 5.0x, and accordingly, did not make the previously scheduled debt amortization payments for its outstanding notes beginning in the second quarter of 2024. Accordingly, all principal amounts of the Company’s outstanding notes have been classified as long-term debt in the condensed consolidated balance sheet as of September 8, 2024.
v3.24.3
Fair Value Measurements
 8 Months Ended
Sep. 08, 2024
Fair Value Disclosures [Abstract]  
Fair Value Measurements

6. Fair Value Measurements

Fair value measurements enable the reader of the financial statements to assess the inputs used to develop those measurements by establishing a hierarchy for ranking the quality and reliability of the information used to determine fair values. The Company classifies and discloses assets and liabilities carried at fair value in one of the following three categories:

Level 1: Quoted market prices in active markets for identical assets or liabilities.

Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data.

Level 3: Unobservable inputs that are not corroborated by market data.

 

Fair Value of Cash Equivalents and Marketable Securities

 

The fair values of the Company’s cash equivalents and investments in marketable securities are based on quoted prices in active markets for identical assets.

 

Fair Value of Investments

The Company holds a non-controlling interest in DPC Dash Ltd (“DPC Dash”), the Company’s master franchisee in China that owns and operates Domino’s Pizza stores in that market. The Company accounts for its investment in DPC Dash as a trading security and records it at fair value at the end of each reporting period, with gains and losses recorded in other income or expense in its condensed consolidated statements of income. As of September 8, 2024, the fair value of the Company’s investment in 18,101,019 DPC Dash ordinary shares is based on the active exchange quoted price for the equity security of HK$69.95 per share (HK: 1405).

The Company recorded a positive adjustment to the carrying amount of its investment in DPC Dash of $26.2 million and $18.9 million in the third quarter and three fiscal quarters of 2024, respectively. These amounts were recorded in other income in the Company’s condensed consolidated statements of income. The Company recorded a positive adjustment to the carrying amount of its investment in DPC Dash of $28.2 million and $13.3 million in the third quarter and three fiscal quarters of 2023, respectively.

The following tables summarize the carrying amounts and fair values of certain assets at September 8, 2024 and December 31, 2023:

 

 

 

At September 8, 2024

 

 

 

 

 

 

Fair Value Estimated Using

 

 

 

Carrying

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

 

Amount

 

 

Inputs

 

 

Inputs

 

 

Inputs

 

Cash equivalents

 

$

157,509

 

 

$

157,509

 

 

$

—

 

 

$

—

 

Restricted cash equivalents

 

 

121,461

 

 

 

121,461

 

 

 

—

 

 

 

—

 

Investments in marketable securities

 

 

19,941

 

 

 

19,941

 

 

 

—

 

 

 

—

 

Advertising fund cash equivalents, restricted

 

 

68,543

 

 

 

68,543

 

 

 

—

 

 

 

—

 

Investment in DPC Dash

 

 

162,424

 

 

 

162,424

 

 

 

—

 

 

 

—

 

 

 

 

At December 31, 2023

 

 

 

 

 

 

Fair Value Estimated Using

 

 

 

Carrying

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

 

Amount

 

 

Inputs

 

 

Inputs

 

 

Inputs

 

Cash equivalents

 

$

50,732

 

 

$

50,732

 

 

$

—

 

 

$

—

 

Restricted cash equivalents

 

 

133,063

 

 

 

133,063

 

 

 

—

 

 

 

—

 

Investments in marketable securities

 

 

16,720

 

 

 

16,720

 

 

 

—

 

 

 

—

 

Advertising fund cash equivalents, restricted

 

 

69,199

 

 

 

69,199

 

 

 

—

 

 

 

—

 

Investment in DPC Dash

 

 

143,553

 

 

 

143,553

 

 

 

—

 

 

 

—

 

 

Fair Value of Debt

 

The estimated fair values of the Company’s fixed rate notes are classified as Level 2 measurements, as the Company estimates the fair value amount by using available market information. The Company obtained quotes from two separate brokerage firms that are knowledgeable about the Company’s fixed rate notes and, at times, trade these notes. The Company also performed its own internal analysis based on the information gathered from public markets, including information on notes that are similar to those of the Company. However, considerable judgment is required to interpret market data to estimate fair value. Accordingly, the fair value estimates presented are not necessarily indicative of the amount that the Company or the noteholders could realize in a current market exchange. The use of different assumptions and/or estimation methodologies may have a material effect on the estimated fair values stated below.

 

Management estimated the approximate fair values of the Company’s 2015, 2017, 2018, 2019 and 2021 notes as follows:

 

 

September 8, 2024

 

 

December 31, 2023

 

 

 

Principal Amount

 

 

Fair Value

 

 

Principal Amount

 

 

Fair Value

 

2015 Ten-Year Notes

 

$

742,000

 

 

$

736,064

 

 

$

744,000

 

 

$

727,632

 

2017 Ten-Year Notes

 

 

940,000

 

 

 

923,080

 

 

 

942,500

 

 

 

895,375

 

2018 7.5-Year Notes

 

 

402,688

 

 

 

397,855

 

 

 

403,750

 

 

 

392,041

 

2018 9.25-Year Notes

 

 

379,000

 

 

 

374,831

 

 

 

380,000

 

 

 

365,180

 

2019 Ten-Year Notes

 

 

648,000

 

 

 

613,656

 

 

 

649,688

 

 

 

591,865

 

2021 7.5-Year Notes

 

 

826,625

 

 

 

761,322

 

 

 

828,750

 

 

 

730,958

 

2021 Ten-Year Notes

 

 

972,500

 

 

 

876,223

 

 

 

975,000

 

 

 

830,700

 

 

The Company did not have any outstanding borrowings under its variable funding notes at September 8, 2024 or December 31, 2023.
v3.24.3
Revenue Disclosures
 8 Months Ended
Sep. 08, 2024
Revenue from Contract with Customer [Abstract]  
Revenue Disclosures

7. Revenue Disclosures

 

Contract Liabilities

 

Contract liabilities primarily consist of deferred franchise fees and deferred development fees. Deferred franchise fees and deferred development fees of $5.2 million and $5.3 million were included in current other accrued liabilities as of September 8, 2024 and December 31, 2023, respectively. Deferred franchise fees and deferred development fees of $18.0 million and $19.9 million were included in long-term other accrued liabilities as of September 8, 2024 and December 31, 2023, respectively.

 

Changes in deferred franchise fees and deferred development fees for the three fiscal quarters of 2024 and 2023 were as follows:

 

 

 

Three Fiscal Quarters Ended

 

 

 

September 8,

 

 

September 10,

 

 

 

2024

 

 

2023

 

Deferred franchise fees and deferred development fees, beginning of period

 

$

25,195

 

 

$

28,225

 

Revenue recognized during the period

 

 

(4,292

)

 

 

(4,680

)

New deferrals due to cash received and other

 

 

2,281

 

 

 

2,456

 

Deferred franchise fees and deferred development fees, end of period

 

$

23,184

 

 

$

26,001

 

Advertising Fund Assets

 

As of September 8, 2024, advertising fund assets, restricted of $111.1 million consisted of $90.0 million of cash and cash equivalents, $13.7 million of accounts receivable and $7.4 million of prepaid expenses. As of September 8, 2024, advertising fund cash and cash equivalents included $1.9 million of cash contributed from U.S. Company-owned stores that had not yet been expended.

 

As of December 31, 2023, advertising fund assets, restricted of $106.3 million consisted of $88.2 million of cash and cash equivalents, $14.0 million of accounts receivable and $4.1 million of prepaid expenses. As of December 31, 2023, advertising fund cash and cash equivalents included $2.1 million of cash contributed from U.S. Company-owned stores that had not yet been expended.

 

Change in Advertising Fund Contributions and Technology Fees

As previously announced, as of March 27, 2023, Domino's National Advertising Fund Inc., the Company’s consolidated not-for-profit advertising subsidiary, effectuated a temporary reduction of 0.25% to its standard 6.0% advertising contribution rate. This temporary reduction expired at the beginning of the second quarter of 2024 and the advertising contribution rate returned to its standard 6.0% as of March 25, 2024.

Additionally, as of March 25, 2024, the Company decreased the U.S. digital per-transaction technology fees that are recognized as the related U.S. franchise retail sales occur by $0.04 to $0.355.
v3.24.3
Leases
 8 Months Ended
Sep. 08, 2024
Leases [Abstract]  
Leases

8. Leases

The Company leases certain retail store and supply chain center locations, vehicles, equipment and its corporate headquarters with expiration dates through 2045. Rent expense totaled $21.0 million and $63.2 million in the third quarter and three fiscal quarters of 2024, respectively. Rent expense totaled $19.7 million and $58.8 million in the third quarter and three fiscal quarters of 2023, respectively. Rent expense includes operating lease cost, as well as expense for non-lease components including common area maintenance, real estate taxes and insurance for the Company’s real estate leases. Rent expense also includes the variable rate per mile driven and fixed maintenance charges for the Company’s supply chain center tractors and trailers and expense for short-term rentals. Rent expense for certain short-term supply chain center tractor and trailer rentals was $1.5 million and $5.4 million in the third quarter and three fiscal quarters of 2024, respectively. Rent expense for certain short-term supply chain center tractor and trailer rentals was $1.4 million and $4.1 million in the third quarter and three fiscal quarters of 2023, respectively. Variable rent expense and rent expense for other short-term leases were immaterial in each of the third quarter and three fiscal quarters of 2024 and 2023.

The components of operating and finance lease cost for the third quarter and three fiscal quarters of 2024 and the third quarter and three fiscal quarters of 2023 were as follows:

 

 

Fiscal Quarter Ended

 

 

Three Fiscal Quarters Ended

 

 

 

September 8,

 

 

September 10,

 

 

September 8,

 

 

September 10,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Operating lease cost

 

$

11,545

 

 

$

11,058

 

 

$

34,260

 

 

$

32,734

 

Finance lease cost:

 

 

 

 

 

 

 

 

 

 

 

 

Amortization of right-of-use assets

 

 

1,303

 

 

 

1,282

 

 

 

3,949

 

 

 

3,794

 

Interest on lease liabilities

 

 

943

 

 

 

1,010

 

 

 

2,900

 

 

 

3,008

 

Total finance lease cost

 

$

2,246

 

 

$

2,292

 

 

$

6,849

 

 

$

6,802

 

 

Supplemental cash flow information related to leases for the three fiscal quarters of 2024 and the three fiscal quarters of 2023 was as follows:

 

 

Three Fiscal Quarters Ended

 

 

 

September 8,

 

 

September 10,

 

 

 

2024

 

 

2023

 

Cash paid for amounts included in the measurement of lease liabilities:

 

 

 

 

 

 

Operating cash flows from operating leases

 

$

33,693

 

 

$

31,889

 

Operating cash flows from finance leases

 

 

2,900

 

 

 

3,008

 

Financing cash flows from finance leases

 

 

3,014

 

 

 

2,724

 

Cash paid for amounts included in the measurement of
   financing obligation from sale leaseback:

 

 

 

 

 

 

Operating cash flows from sale leaseback

 

 

896

 

 

 

—

 

Financing cash flows from sale leaseback

 

 

58

 

 

 

—

 

Right-of-use assets obtained in exchange for lease obligations:

 

 

 

 

 

 

Operating leases

 

 

40,800

 

 

 

17,405

 

Finance leases

 

 

1,442

 

 

 

3,452

 

As of September 8, 2024, the Company had additional leases for certain supply chain real estate and certain supply chain vehicles that had not yet commenced with estimated future minimum rental commitments of $162.2 million. These leases are expected to commence in 2024 and 2025 with lease terms of up to 20 years. These undiscounted amounts will be included in the Company’s condensed consolidated balance sheet at the respective commencement dates.

The Company has guaranteed lease payments related to certain franchisees’ lease arrangements. The maximum amount of potential future payments under these guarantees was $14.2 million and $18.5 million as of September 8, 2024 and December 31, 2023, respectively. The Company does not believe these arrangements have or are likely to have a material effect on its results of operations, financial condition, revenues, expenses or liquidity.
v3.24.3
Supplemental Disclosures of Cash Flow Information
 8 Months Ended
Sep. 08, 2024
Supplemental Cash Flow Elements [Abstract]  
Supplemental Disclosures of Cash Flow Information

9. Supplemental Disclosures of Cash Flow Information

 

The Company had non-cash investing activities related to accruals for capital expenditures of $6.0 million at September 8, 2024 and $6.7 million at December 31, 2023. The Company also had $4.5 million and $2.6 million in non-cash financing activity related to accruals for excise taxes on share repurchases as of September 8, 2024 and December 31, 2023, respectively.
v3.24.3
Company-owned Store Transactions
 8 Months Ended
Sep. 08, 2024
Business Combinations [Abstract]  
Company-owned Store Transactions

10. Company-owned Store Transactions

 

During each of the first and second quarters of 2024, the Company refranchised one U.S. Company-owned store for proceeds of less than $0.1 million each. The pre-tax refranchising losses associated with the sale of the related assets and liabilities, including goodwill, were approximately $0.1 million each and were recorded in refranchising loss in the Company’s condensed consolidated statements of income.

 

During the first quarter of 2023, the Company refranchised one U.S. Company-owned store for proceeds of less than $0.1 million. The pre-tax refranchising loss associated with the sale of the related assets and liabilities, including goodwill, was approximately $0.1 million and was recorded in refranchising loss in the Company’s condensed consolidated statements of income.
v3.24.3
New Accounting Pronouncements
 8 Months Ended
Sep. 08, 2024
Accounting Changes and Error Corrections [Abstract]  
New Accounting Pronouncements

11. New Accounting Pronouncements

The Company has considered all new accounting standards issued by the Financial Accounting Standards Board (“FASB”). The Company has not yet adopted the following standards:

Accounting Standards Not Yet Adopted

Accounting Standards Update (“ASU”) 2020-04, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures

 

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires disclosure on an annual and interim basis of significant segment expenses that are regularly provided to the chief operating decision maker and included within the reported measure of segment profit or loss. In addition, the ASU requires disclosure of other segment expenses by reportable segment and a description of their composition to permit the reconciliation between segment revenue, significant segment expenses and the reported segment measure of profit or loss. The ASU also requires disclosure of the name and title of the chief operating decision maker.

ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, and early adoption is permitted. The Company is currently evaluating the impact of this accounting standard on its consolidated financial statements.

ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures

 

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires disclosure on an annual basis, of a tabular reconciliation, including both amount and percentage of specific categories of the effective tax rate reconciliation, including state and local income taxes (net of Federal taxes), foreign taxes, effects of changes in tax laws and regulations, effects of cross-border tax laws, tax credits, changes in valuation allowances, nontaxable and nondeductible items and changes in unrecognized tax benefits. Additional disclosures are required for certain items exceeding five percent of income from continuing operations multiplied by the statutory income tax rate. The standard also requires disclosure of income taxes paid between Federal, state and foreign jurisdictions, including further disaggregation of those payments exceeding five percent of the total income taxes paid.

ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, and early adoption is permitted. The Company is currently evaluating the impact of this accounting standard on its consolidated financial statements.
v3.24.3
Segment Information (Tables)
 8 Months Ended
Sep. 08, 2024
Segment Reporting [Abstract]  
Financial Information by Operating Segment

The tables below summarize the financial information concerning the Company’s reportable segments for the third quarter and three fiscal quarters of 2024 and the third quarter and three fiscal quarters of 2023. Intersegment revenues are comprised of sales of food, equipment and supplies from the supply chain segment to the Company-owned stores in the U.S. stores segment. Intersegment sales prices are market based. The “Other” column as it relates to Segment Income below primarily includes corporate administrative costs that are not allocable to a reportable segment, including labor, computer expenses, professional fees, travel and entertainment, rent, insurance and other corporate administrative costs.

 

 

 

Fiscal Quarters Ended September 8, 2024 and September 10, 2023

 

 

 

U.S.

 

 

Supply

 

 

International

 

 

Intersegment

 

 

 

 

 

 

 

 

 

Stores

 

 

Chain

 

 

Franchise

 

 

Revenues

 

 

Other

 

 

Total

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2024

 

$

354,172

 

 

$

679,664

 

 

$

74,633

 

 

$

(28,350

)

 

$

—

 

 

$

1,080,119

 

2023

 

 

336,133

 

 

 

643,728

 

 

 

73,142

 

 

 

(25,642

)

 

 

—

 

 

 

1,027,361

 

Segment Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2024

 

$

128,577

 

 

$

61,173

 

 

$

62,367

 

 

N/A

 

 

$

(22,839

)

 

$

229,278

 

2023

 

 

120,351

 

 

 

55,250

 

 

 

61,495

 

 

N/A

 

 

 

(19,809

)

 

 

217,287

 

 

 

 

Three Fiscal Quarters Ended September 8, 2024 and September 10, 2023

 

 

 

U.S.

 

 

Supply

 

 

International

 

 

Intersegment

 

 

 

 

 

 

 

 

 

Stores

 

 

Chain

 

 

Franchise

 

 

Revenues

 

 

Other

 

 

Total

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2024

 

$

1,072,435

 

 

$

2,053,055

 

 

$

220,295

 

 

$

(83,283

)

 

$

—

 

 

$

3,262,502

 

2023

 

 

1,005,055

 

 

 

1,935,332

 

 

 

213,308

 

 

 

(77,309

)

 

 

—

 

 

 

3,076,386

 

Segment Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2024

 

$

394,167

 

 

$

190,736

 

 

$

180,796

 

 

N/A

 

 

$

(67,178

)

 

$

698,521

 

2023

 

 

356,626

 

 

 

163,791

 

 

 

178,499

 

 

N/A

 

 

 

(54,396

)

 

 

644,520

 
Reconciliation of Total Segment Income to Consolidated Income Before Provision for Income Taxes

The following table reconciles total Segment Income to consolidated income before provision for income taxes.

 

 

 

Fiscal Quarter Ended

 

 

Three Fiscal Quarters Ended

 

 

 

September 8,

 

 

September 10,

 

 

September 8,

 

 

September 10,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Total Segment Income

 

$

229,278

 

 

$

217,287

 

 

$

698,521

 

 

$

644,520

 

Depreciation and amortization

 

 

(20,756

)

 

 

(18,268

)

 

 

(60,974

)

 

 

(54,999

)

Refranchising loss

 

 

—

 

 

 

—

 

 

 

(158

)

 

 

(149

)

Loss on sale/disposal of assets

 

 

(174

)

 

 

(145

)

 

 

(501

)

 

 

(547

)

Non-cash equity-based compensation expense

 

 

(9,517

)

 

 

(9,442

)

 

 

(31,541

)

 

 

(26,507

)

Income from operations

 

 

198,831

 

 

 

189,432

 

 

 

605,347

 

 

 

562,318

 

Other income

 

 

26,172

 

 

 

28,231

 

 

 

18,871

 

 

 

13,267

 

Interest income

 

 

4,339

 

 

 

2,707

 

 

 

12,297

 

 

 

7,635

 

Interest expense

 

 

(44,726

)

 

 

(44,796

)

 

 

(135,293

)

 

 

(136,275

)

Income before provision for income taxes

 

$

184,616

 

 

$

175,574

 

 

$

501,222

 

 

$

446,945

 
v3.24.3
Earnings Per Share (Tables)
 8 Months Ended
Sep. 08, 2024
Earnings Per Share [Abstract]  
Earnings Per Share

 

 

Fiscal Quarter Ended

 

 

Three Fiscal Quarters Ended

 

 

 

September 8,

 

 

September 10,

 

 

September 8,

 

 

September 10,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Net income available to common stockholders - basic and diluted

 

$

146,924

 

 

$

147,676

 

 

$

414,726

 

 

$

361,826

 

Basic weighted average number of shares

 

 

34,801,086

 

 

 

35,030,660

 

 

 

34,835,394

 

 

 

35,207,117

 

Earnings per share – basic

 

$

4.22

 

 

$

4.22

 

 

$

11.91

 

 

$

10.28

 

Diluted weighted average number of shares

 

 

35,039,408

 

 

 

35,357,043

 

 

 

35,145,732

 

 

 

35,516,434

 

Earnings per share – diluted

 

$

4.19

 

 

$

4.18

 

 

$

11.80

 

 

$

10.19

 
Schedule of Denominators Used in Calculating Earning Per Common Share

The denominators used in calculating diluted earnings per share for common stock for the fiscal quarters and three fiscal quarters each ended September 8, 2024 and September 10, 2023 do not include the following because the effect of including these shares would be anti-dilutive or because the performance targets for these awards had not yet been met:

 

 

 

Fiscal Quarter Ended

 

 

Three Fiscal Quarters Ended

 

 

 

September 8,

 

 

September 10,

 

 

September 8,

 

 

September 10,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Anti-dilutive shares underlying stock-based awards

 

 

 

 

 

 

 

 

 

 

 

 

   Stock options

 

 

44,342

 

 

 

207,218

 

 

 

46,290

 

 

 

228,747

 

   Restricted stock awards and units

 

 

4,223

 

 

 

526

 

 

 

4,223

 

 

 

27,615

 

Performance condition not met

 

 

 

 

 

 

 

 

 

 

 

 

   Restricted stock awards and units

 

 

49,742

 

 

 

59,622

 

 

 

49,742

 

 

 

59,622

 
v3.24.3
Stockholders' Deficit (Tables)
 8 Months Ended
Sep. 08, 2024
Federal Home Loan Banks [Abstract]  
Changes in Stockholders' Deficit

The following table summarizes the changes in stockholders’ deficit for the third quarter of 2024.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

Other

 

 

 

Common Stock

 

 

Paid-in

 

 

Retained

 

 

Comprehensive

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Loss

 

Balance at June 16, 2024

 

 

34,956,623

 

 

$

350

 

 

$

30,008

 

 

$

(3,916,008

)

 

$

(5,475

)

Net income

 

 

—

 

 

 

—

 

 

 

—

 

 

 

146,924

 

 

 

—

 

Dividends declared on common stock and equivalents
($1.51 per share)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(52,502

)

 

 

—

 

Issuance and cancellation of stock awards, net

 

 

3,466

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Tax payments for restricted stock upon vesting

 

 

(3,029

)

 

 

(1

)

 

 

(1,445

)

 

 

—

 

 

 

—

 

Purchases of common stock

 

 

(443,302

)

 

 

(4

)

 

 

(39,572

)

 

 

(152,230

)

 

 

—

 

Exercise of stock options

 

 

16,612

 

 

 

—

 

 

 

3,202

 

 

 

—

 

 

 

—

 

Non-cash equity-based compensation expense

 

 

—

 

 

 

—

 

 

 

9,517

 

 

 

—

 

 

 

—

 

Currency translation adjustment

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

598

 

Balance at September 8, 2024

 

 

34,530,370

 

 

$

345

 

 

$

1,710

 

 

$

(3,973,816

)

 

$

(4,877

)

The following table summarizes the changes in stockholders’ deficit for the three fiscal quarters of 2024.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

Other

 

 

 

Common Stock

 

 

Paid-in

 

 

Retained

 

 

Comprehensive

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Loss

 

Balance at December 31, 2023

 

 

34,726,182

 

 

$

347

 

 

$

2,801

 

 

$

(4,069,648

)

 

$

(3,867

)

Net income

 

 

—

 

 

 

—

 

 

 

—

 

 

 

414,726

 

 

 

—

 

Dividends declared on common stock and equivalents
($4.53 per share)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(158,565

)

 

 

—

 

Issuance and cancellation of stock awards, net

 

 

65,135

 

 

 

1

 

 

 

—

 

 

 

—

 

 

 

—

 

Tax payments for restricted stock upon vesting

 

 

(23,417

)

 

 

(1

)

 

 

(10,705

)

 

 

—

 

 

 

—

 

Purchases of common stock

 

 

(499,674

)

 

 

(5

)

 

 

(56,593

)

 

 

(160,329

)

 

 

—

 

Exercise of stock options

 

 

262,144

 

 

 

3

 

 

 

34,666

 

 

 

—

 

 

 

—

 

Non-cash equity-based compensation expense

 

 

—

 

 

 

—

 

 

 

31,541

 

 

 

—

 

 

 

—

 

Currency translation adjustment

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(1,010

)

Balance at September 8, 2024

 

 

34,530,370

 

 

$

345

 

 

$

1,710

 

 

$

(3,973,816

)

 

$

(4,877

)

 

The following table summarizes the changes in stockholders’ deficit for the third quarter of 2023.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

Other

 

 

 

Common Stock

 

 

Paid-in

 

 

Retained

 

 

Comprehensive

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Loss

 

Balance at June 18, 2023

 

 

35,057,585

 

 

$

351

 

 

$

3,370

 

 

$

(4,166,520

)

 

$

(3,767

)

Net income

 

 

—

 

 

 

—

 

 

 

—

 

 

 

147,676

 

 

 

—

 

Dividends declared on common stock and equivalents
($1.21 per share)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(42,493

)

 

 

—

 

Issuance and cancellation of stock awards, net

 

 

4,142

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Tax payments for restricted stock upon vesting

 

 

(5,932

)

 

 

—

 

 

 

(2,172

)

 

 

—

 

 

 

—

 

Purchases of common stock

 

 

(229,860

)

 

 

(3

)

 

 

(14,435

)

 

 

(76,416

)

 

 

—

 

Exercise of stock options

 

 

53,188

 

 

 

1

 

 

 

4,754

 

 

 

—

 

 

 

—

 

Non-cash equity-based compensation expense

 

 

—

 

 

 

—

 

 

 

9,442

 

 

 

—

 

 

 

—

 

Currency translation adjustment

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(1,330

)

Balance at September 10, 2023

 

 

34,879,123

 

 

$

349

 

 

$

959

 

 

$

(4,137,753

)

 

$

(5,097

)

 

The following table summarizes the changes in stockholders’ deficit for the three fiscal quarters of 2023.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

Other

 

 

 

Common Stock

 

 

Paid-in

 

 

Retained

 

 

Comprehensive

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Loss

 

Balance at January 1, 2023

 

 

35,419,718

 

 

$

354

 

 

$

9,693

 

 

$

(4,194,418

)

 

$

(4,694

)

Net income

 

 

—

 

 

 

—

 

 

 

—

 

 

 

361,826

 

 

 

—

 

Dividends declared on common stock and equivalents
($3.63 per share)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(128,143

)

 

 

—

 

Issuance and cancellation of stock awards, net

 

 

32,715

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Tax payments for restricted stock upon vesting

 

 

(15,601

)

 

 

—

 

 

 

(5,240

)

 

 

—

 

 

 

—

 

Purchases of common stock

 

 

(622,405

)

 

 

(6

)

 

 

(35,806

)

 

 

(177,018

)

 

 

—

 

Exercise of stock options

 

 

64,696

 

 

 

1

 

 

 

5,805

 

 

 

—

 

 

 

—

 

Non-cash equity-based compensation expense

 

 

—

 

 

 

—

 

 

 

26,507

 

 

 

—

 

 

 

—

 

Currency translation adjustment

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(403

)

Balance at September 10, 2023

 

 

34,879,123

 

 

$

349

 

 

$

959

 

 

$

(4,137,753

)

 

$

(5,097

)
v3.24.3
Fair Value Measurements (Tables)
 8 Months Ended
Sep. 08, 2024
Fair Value Disclosures [Abstract]  
Carrying Amounts and Fair Values of Certain Assets

The following tables summarize the carrying amounts and fair values of certain assets at September 8, 2024 and December 31, 2023:

 

 

 

At September 8, 2024

 

 

 

 

 

 

Fair Value Estimated Using

 

 

 

Carrying

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

 

Amount

 

 

Inputs

 

 

Inputs

 

 

Inputs

 

Cash equivalents

 

$

157,509

 

 

$

157,509

 

 

$

—

 

 

$

—

 

Restricted cash equivalents

 

 

121,461

 

 

 

121,461

 

 

 

—

 

 

 

—

 

Investments in marketable securities

 

 

19,941

 

 

 

19,941

 

 

 

—

 

 

 

—

 

Advertising fund cash equivalents, restricted

 

 

68,543

 

 

 

68,543

 

 

 

—

 

 

 

—

 

Investment in DPC Dash

 

 

162,424

 

 

 

162,424

 

 

 

—

 

 

 

—

 

 

 

 

At December 31, 2023

 

 

 

 

 

 

Fair Value Estimated Using

 

 

 

Carrying

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

 

Amount

 

 

Inputs

 

 

Inputs

 

 

Inputs

 

Cash equivalents

 

$

50,732

 

 

$

50,732

 

 

$

—

 

 

$

—

 

Restricted cash equivalents

 

 

133,063

 

 

 

133,063

 

 

 

—

 

 

 

—

 

Investments in marketable securities

 

 

16,720

 

 

 

16,720

 

 

 

—

 

 

 

—

 

Advertising fund cash equivalents, restricted

 

 

69,199

 

 

 

69,199

 

 

 

—

 

 

 

—

 

Investment in DPC Dash

 

 

143,553

 

 

 

143,553

 

 

 

—

 

 

 

—

 
Schedule of Estimated Fair Value

Management estimated the approximate fair values of the Company’s 2015, 2017, 2018, 2019 and 2021 notes as follows:

 

 

September 8, 2024

 

 

December 31, 2023

 

 

 

Principal Amount

 

 

Fair Value

 

 

Principal Amount

 

 

Fair Value

 

2015 Ten-Year Notes

 

$

742,000

 

 

$

736,064

 

 

$

744,000

 

 

$

727,632

 

2017 Ten-Year Notes

 

 

940,000

 

 

 

923,080

 

 

 

942,500

 

 

 

895,375

 

2018 7.5-Year Notes

 

 

402,688

 

 

 

397,855

 

 

 

403,750

 

 

 

392,041

 

2018 9.25-Year Notes

 

 

379,000

 

 

 

374,831

 

 

 

380,000

 

 

 

365,180

 

2019 Ten-Year Notes

 

 

648,000

 

 

 

613,656

 

 

 

649,688

 

 

 

591,865

 

2021 7.5-Year Notes

 

 

826,625

 

 

 

761,322

 

 

 

828,750

 

 

 

730,958

 

2021 Ten-Year Notes

 

 

972,500

 

 

 

876,223

 

 

 

975,000

 

 

 

830,700

 
v3.24.3
Revenue Disclosures (Tables)
 8 Months Ended
Sep. 08, 2024
Revenue from Contract with Customer [Abstract]  
Schedule of Contract Liabilities Consist of Deferred Franchise Fees and Deferred Development Fees

Changes in deferred franchise fees and deferred development fees for the three fiscal quarters of 2024 and 2023 were as follows:

 

 

 

Three Fiscal Quarters Ended

 

 

 

September 8,

 

 

September 10,

 

 

 

2024

 

 

2023

 

Deferred franchise fees and deferred development fees, beginning of period

 

$

25,195

 

 

$

28,225

 

Revenue recognized during the period

 

 

(4,292

)

 

 

(4,680

)

New deferrals due to cash received and other

 

 

2,281

 

 

 

2,456

 

Deferred franchise fees and deferred development fees, end of period

 

$

23,184

 

 

$

26,001

 
v3.24.3
Leases (Tables)
 8 Months Ended
Sep. 08, 2024
Leases [Abstract]  
Components Of Operating And Finance Lease Cost

The components of operating and finance lease cost for the third quarter and three fiscal quarters of 2024 and the third quarter and three fiscal quarters of 2023 were as follows:

 

 

Fiscal Quarter Ended

 

 

Three Fiscal Quarters Ended

 

 

 

September 8,

 

 

September 10,

 

 

September 8,

 

 

September 10,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Operating lease cost

 

$

11,545

 

 

$

11,058

 

 

$

34,260

 

 

$

32,734

 

Finance lease cost:

 

 

 

 

 

 

 

 

 

 

 

 

Amortization of right-of-use assets

 

 

1,303

 

 

 

1,282

 

 

 

3,949

 

 

 

3,794

 

Interest on lease liabilities

 

 

943

 

 

 

1,010

 

 

 

2,900

 

 

 

3,008

 

Total finance lease cost

 

$

2,246

 

 

$

2,292

 

 

$

6,849

 

 

$

6,802

 
Schedule Of Supplemental Cash Flow Information Related To Leases

Supplemental cash flow information related to leases for the three fiscal quarters of 2024 and the three fiscal quarters of 2023 was as follows:

 

 

Three Fiscal Quarters Ended

 

 

 

September 8,

 

 

September 10,

 

 

 

2024

 

 

2023

 

Cash paid for amounts included in the measurement of lease liabilities:

 

 

 

 

 

 

Operating cash flows from operating leases

 

$

33,693

 

 

$

31,889

 

Operating cash flows from finance leases

 

 

2,900

 

 

 

3,008

 

Financing cash flows from finance leases

 

 

3,014

 

 

 

2,724

 

Cash paid for amounts included in the measurement of
   financing obligation from sale leaseback:

 

 

 

 

 

 

Operating cash flows from sale leaseback

 

 

896

 

 

 

—

 

Financing cash flows from sale leaseback

 

 

58

 

 

 

—

 

Right-of-use assets obtained in exchange for lease obligations:

 

 

 

 

 

 

Operating leases

 

 

40,800

 

 

 

17,405

 

Finance leases

 

 

1,442

 

 

 

3,452

 
v3.24.3
Segment Information - Financial Information by Operating Segment (Detail) - USD ($)
$ in Thousands
 3 Months Ended 8 Months Ended
Sep. 08, 2024
Sep. 10, 2023
Sep. 08, 2024
Sep. 10, 2023
Segment Reporting Information [Line Items]        
Revenues $ 1,080,119 $ 1,027,361 $ 3,262,502 $ 3,076,386
Segment Income 229,278 217,287 698,521 644,520
Operating Segments [Member] | U.S. Stores [Member]        
Segment Reporting Information [Line Items]        
Revenues 354,172 336,133 1,072,435 1,005,055
Segment Income 128,577 120,351 394,167 356,626
Operating Segments [Member] | Supply Chain [Member]        
Segment Reporting Information [Line Items]        
Revenues 679,664 643,728 2,053,055 1,935,332
Segment Income 61,173 55,250 190,736 163,791
Operating Segments [Member] | International Franchise [Member]        
Segment Reporting Information [Line Items]        
Revenues 74,633 73,142 220,295 213,308
Segment Income 62,367 61,495 180,796 178,499
Intersegment Revenues [Member]        
Segment Reporting Information [Line Items]        
Revenues (28,350) (25,642) (83,283) (77,309)
Segment Reconciling [Member]        
Segment Reporting Information [Line Items]        
Revenues 0 0 0 0
Segment Income $ (22,839) $ (19,809) $ (67,178) $ (54,396)
v3.24.3
Segment Information - Reconciliation of Total Segment Income to Consolidated Income Before Provision for Income Taxes (Detail) - USD ($)
$ in Thousands
 3 Months Ended 8 Months Ended
Sep. 08, 2024
Sep. 10, 2023
Sep. 08, 2024
Sep. 10, 2023
Segment Reconciliation [Abstract]        
Total Segment Income $ 229,278 $ 217,287 $ 698,521 $ 644,520
Depreciation and amortization (20,756) (18,268) (60,974) (54,999)
Refranchising loss 0 0 (158) (149)
Loss on sale/disposal of assets (174) (145) (501) (547)
Non-cash equity-based compensation expense (9,517) (9,442) (31,541) (26,507)
Income from operations 198,831 189,432 605,347 562,318
Other income 26,172 28,231 18,871 13,267
Interest income 4,339 2,707 12,297 7,635
Interest expense (44,726) (44,796) (135,293) (136,275)
Income before provision for income taxes $ 184,616 $ 175,574 $ 501,222 $ 446,945
v3.24.3
Earnings Per Share - Summary of Computation of Basic and Diluted Earning per Share (Detail) - USD ($)
$ / shares in Units, $ in Thousands
 3 Months Ended 8 Months Ended
Sep. 08, 2024
Sep. 10, 2023
Sep. 08, 2024
Sep. 10, 2023
Earnings Per Share [Abstract]        
Net income $ 146,924 $ 147,676 $ 414,726 $ 361,826
Basic weighted average number of shares 34,801,086 35,030,660 34,835,394 35,207,117
Earnings per share – basic $ 4.22 $ 4.22 $ 11.91 $ 10.28
Diluted weighted average number of shares 35,039,408 35,357,043 35,145,732 35,516,434
Earnings per share - diluted $ 4.19 $ 4.18 $ 11.8 $ 10.19
v3.24.3
Earnings Per Share - Schedule of Denominators Used in Calculating Earning Per Common Share (Detail) - shares
 3 Months Ended 8 Months Ended
Sep. 08, 2024
Sep. 10, 2023
Sep. 08, 2024
Sep. 10, 2023
Employee Stock Option        
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]        
Anti-dilutive Securities Excluded from Computation of Earnings Per Share 44,342 207,218 46,290 228,747
Restricted Stock [Member]        
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]        
Anti-dilutive Securities Excluded from Computation of Earnings Per Share 4,223 526 4,223 27,615
Restricted Performance Shares [Member]        
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]        
Securities excluded from computation of earnings per share, amount unvested 49,742 59,622 49,742 59,622
v3.24.3
Stockholders' Deficit - Additional Information (Detail) - $ / shares
 3 Months Ended 8 Months Ended
Oct. 08, 2024
Sep. 08, 2024
Sep. 10, 2023
Sep. 08, 2024
Sep. 10, 2023
Dividends declared per share   $ 1.51 $ 1.21 $ 4.53 $ 3.63
Subsequent Event [Member] | O 2024 Q3 Dividends [Member]          
Dividends declared per share $ 1.51        
Record date of dividend Dec. 13, 2024        
Dividend declared date Oct. 08, 2024        
Dividend payable date Dec. 27, 2024        
v3.24.3
Stockholders' Deficit (Detail) - USD ($)
$ in Thousands
 3 Months Ended 8 Months Ended
Sep. 08, 2024
Sep. 10, 2023
Sep. 08, 2024
Sep. 10, 2023
Stockholders' Deficit [Line Items]        
Balance [1]     $ (4,070,367)  
Net Income (Loss) $ 146,924 $ 147,676 414,726 $ 361,826
Balance $ (3,976,638)   $ (3,976,638)  
Common Stock [Member]        
Stockholders' Deficit [Line Items]        
Balance (in shares) 34,956,623 35,057,585 34,726,182 35,419,718
Balance $ 350 $ 351 $ 347 $ 354
Issuance and cancellation of stock awards, net (in shares) 3,466 4,142 65,135 32,715
Issuance and cancellation of stock awards, net     $ 1  
Tax payments for restricted stock upon vesting, (in shares) (3,029) (5,932) (23,417) (15,601)
Tax payments for restricted stock upon vesting $ (1)   $ (1)  
Purchases of common stock, (in shares) (443,302) (229,860) (499,674) (622,405)
Purchases of common stock $ (4) $ (3) $ (5) $ (6)
Exercises of stock options, (in shares) 16,612 53,188 262,144 64,696
Exercises of stock options   $ 1 $ 3 $ 1
Balance (in shares) 34,530,370 34,879,123 34,530,370 34,879,123
Balance $ 345 $ 349 $ 345 $ 349
Additional Paid-in Capital [Member]        
Stockholders' Deficit [Line Items]        
Balance 30,008 3,370 2,801 9,693
Tax payments for restricted stock upon vesting (1,445) (2,172) (10,705) (5,240)
Purchases of common stock (39,572) (14,435) (56,593) (35,806)
Exercises of stock options 3,202 4,754 34,666 5,805
Non-cash equity-based compensation expense 9,517 9,442 31,541 26,507
Balance 1,710 959 1,710 959
Retained Deficit [Member]        
Stockholders' Deficit [Line Items]        
Balance (3,916,008) (4,166,520) (4,069,648) (4,194,418)
Net Income (Loss) 146,924 147,676 414,726 361,826
Dividends declared on common stock and equivalents (52,502) (42,493) (158,565) (128,143)
Purchases of common stock (152,230) (76,416) (160,329) (177,018)
Balance (3,973,816) (4,137,753) (3,973,816) (4,137,753)
Accumulated Other Comprehensive Loss [Member]        
Stockholders' Deficit [Line Items]        
Balance (5,475) (3,767) (3,867) (4,694)
Currency translation adjustment 598 (1,330) (1,010) (403)
Balance $ (4,877) $ (5,097) $ (4,877) $ (5,097)
[1] The condensed consolidated balance sheet at December 31, 2023 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements.
v3.24.3
Stockholders' Deficit (Parenthetical) (Detail) - $ / shares
 3 Months Ended 8 Months Ended
Sep. 08, 2024
Sep. 10, 2023
Sep. 08, 2024
Sep. 10, 2023
Dividends declared per share $ 1.51 $ 1.21 $ 4.53 $ 3.63
v3.24.3
Leverage Ratio (Additional Information) (Details)
Sep. 08, 2024
Jun. 16, 2024
Mar. 24, 2024
EBITDA      
Leverage Ratio [Line Items]      
Holdco Leverage Ratio 0.05 0.05 0.05
v3.24.3
Fair Value Measurements - Additional Information (Detail) - USD ($)
$ / shares in Units, $ in Thousands
 3 Months Ended 8 Months Ended
Sep. 08, 2024
Sep. 10, 2023
Sep. 08, 2024
Sep. 10, 2023
Unrealized gain/loss on investments     $ 18,871 $ 13,267
Dash Brands Ltd [Member]        
Unrealized gain/loss on investments $ 26,200 $ 28,200 $ 18,900 $ 13,300
Shares Issued Price Per Share $ 69.95   $ 69.95  
Number of Trading Securities Owned by Registrant     18,101,019  
v3.24.3
Fair Value Measurements - Carrying Amounts and Fair Values of Certain Assets (Detail) - USD ($)
$ in Thousands
Sep. 08, 2024
Dec. 31, 2023
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Cash Equivalents, at Carrying Value $ 157,509 $ 50,732
Restricted cash equivalents, carrying value 121,461 133,063
Investments in marketable securities, carrying value 19,941 16,720
Advertising fund cash equivalents, restricted, carrying amount 68,543 69,199
Investment in DPC Dash, Carrying Amount 162,424 143,553 [1]
Fair Value, Inputs, Level 1 [Member]    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Cash and Cash Equivalents, Fair Value 157,509 50,732
Restricted cash equivalents, carrying value 121,461 133,063
Investments in marketable securities, carrying value 19,941 16,720
Advertising fund cash equivalents, restricted, fair value 68,543 69,199
Investment in DPC Dash, Fair Value $ 162,424 $ 143,553
[1] The condensed consolidated balance sheet at December 31, 2023 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements.
v3.24.3
Fair Value Measurements - Schedule of Estimated Fair Value (Detail) - USD ($)
$ in Thousands
Sep. 08, 2024
Dec. 31, 2023
2015 Ten-Year Notes [Member]    
Debt Instrument [Line Items]    
Principal Amount $ 742,000 $ 744,000
Fair Value 736,064 727,632
2017 Ten-Year Notes [Member]    
Debt Instrument [Line Items]    
Principal Amount 940,000 942,500
Fair Value 923,080 895,375
2018 7.5-Year Notes [Member]    
Debt Instrument [Line Items]    
Principal Amount 402,688 403,750
Fair Value 397,855 392,041
2018 9.25-Year Notes [Member]    
Debt Instrument [Line Items]    
Principal Amount 379,000 380,000
Fair Value 374,831 365,180
2019 Ten-Year Notes [Member]    
Debt Instrument [Line Items]    
Principal Amount 648,000 649,688
Fair Value 613,656 591,865
2021 7.5-Year Notes [Member]    
Debt Instrument [Line Items]    
Principal Amount 826,625 828,750
Fair Value 761,322 730,958
2021 Ten-Year Notes [Member]    
Debt Instrument [Line Items]    
Principal Amount 972,500 975,000
Fair Value $ 876,223 $ 830,700
v3.24.3
Revenue Disclosures - Additional Information (Detail) - USD ($)
$ / shares in Units, $ in Thousands
Mar. 25, 2024
Mar. 27, 2023
Sep. 08, 2024
Dec. 31, 2023
Contract liability, current     $ 5,200 $ 5,300
Contract liability, noncurrent     18,000 19,900
Advertising fund assets, restricted     111,134 106,335 [1]
Temporary reduction   0.25%    
Advertising contribution 6.00%      
Minimum [Member]        
Digital per transaction technology fees $ 0.04      
Maximum [Member]        
Digital per transaction technology fees $ 0.355      
US Stores [Member] | Domestic Franchise [Member] | Cash and Cash Equivalents [Member]        
Advertising fund assets, restricted     90,000 88,200
US Stores [Member] | Domestic Franchise [Member] | Accounts receivable [Member]        
Advertising fund assets, restricted     13,700 14,000
US Stores [Member] | Domestic Franchise [Member] | Prepaid expenses [Member]        
Advertising fund assets, restricted     7,400 4,100
US Stores [Member] | U.S. Company-owned stores [Member]        
Advertising fund assets, restricted     $ 1,900 $ 2,100
[1] The condensed consolidated balance sheet at December 31, 2023 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements.
v3.24.3
Revenue Disclosures - Schedule of Contract Liabilities Consist of Deferred Franchise Fees and Deferred Development Fees (Detail) - USD ($)
$ in Thousands
 8 Months Ended
Sep. 08, 2024
Sep. 10, 2023
Revenue from Contract with Customer [Abstract]    
Deferred franchise fees and deferred development fees, beginning of period $ 25,195 $ 28,225
Revenue recognized during the period (4,292) (4,680)
New deferrals due to cash received and other 2,281 2,456
Deferred franchise fees and deferred development fees, end of period $ 23,184 $ 26,001
v3.24.3
Leases - Additional Information (Detail) - USD ($)
$ in Millions
 3 Months Ended 8 Months Ended
Sep. 08, 2024
Sep. 10, 2023
Sep. 08, 2024
Sep. 10, 2023
Dec. 31, 2023
Rent expense minimum rental $ 1.5 $ 1.4 $ 5.4 $ 4.1  
Rent expense 21.0 $ 19.7 63.2 $ 58.8  
Lessee, operating lease, lease not yet commenced, future minimum rental commitments 162.2   162.2    
Potential future payments $ 14.2   $ 14.2   $ 18.5
Operating Lease [Member]          
Lease Term 20 years   20 years    
v3.24.3
Leases - Components of Operating and Finance Lease Cost (Detail) - USD ($)
$ in Thousands
 3 Months Ended 8 Months Ended
Sep. 08, 2024
Sep. 10, 2023
Sep. 08, 2024
Sep. 10, 2023
Operating lease cost $ 11,545 $ 11,058 $ 34,260 $ 32,734
Finance lease cost:        
Amortization of right-of-use assets 1,303 1,282 3,949 3,794
Interest on lease liabilities 943 1,010 2,900 3,008
Total finance lease cost $ 2,246 $ 2,292 $ 6,849 $ 6,802
v3.24.3
Leases - Supplemental Cash Flow Information Related To Leases (Detail) - USD ($)
$ in Thousands
 8 Months Ended
Sep. 08, 2024
Sep. 10, 2023
Cash paid for amounts included in the measurement of lease liabilities:    
Operating cash flows from operating leases $ 33,693 $ 31,889
Operating cash flows from finance leases 2,900 3,008
Financing cash flows from finance leases 3,014 2,724
Cash Paid For Amounts Included In The Measurement Of Financing Obligation From Sale Leaseback Abstract    
Operating cash flows from sale leaseback 896 0
Financing cash flows from sale leaseback 58 0
Right-of-use assets obtained in exchange for lease obligations:    
Operating leases 40,800 17,405
Finance leases $ 1,442 $ 3,452
v3.24.3
Supplemental Disclosures of Cash Flow Information - Additional Information (Detail) - USD ($)
$ in Millions
 8 Months Ended 12 Months Ended
Sep. 08, 2024
Dec. 31, 2023
Schedule of Cash Flow, Supplemental [Line Items]    
Capital expenditure accrual $ 6.0 $ 6.7
Accruals for excise taxes, non-cash financing activity $ 4.5 $ 2.6
v3.24.3
Company-owned Store Transactions - Additional Information (Detail) - US Franchisee [Member] - USD ($)
$ in Millions
 3 Months Ended
Jun. 16, 2024
Mar. 24, 2024
Mar. 26, 2023
Business Acquisition [Line Items]      
Receipts from sale of franchisees $ 0.1 $ 0.1 $ 0.1
Reduction of goodwill related to sale of stores $ 0.1 $ 0.1 $ 0.1
Dominos Pizza (NYSE:DPZ)
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