Lower costs boost Domino's Pizza's 2nd quarter results

ANN ARBOR (AP) -- Pizza delivery chain Domino's Pizza Inc. said Tuesday that its second-quarter net income rose 11 percent as lower costs offset a decline in revenue. Domino's has been pushing to improve the reputation of its pizza for about two years with the help of Miami ad agency Crispin Porter + Bogusky. A recent ad campaign promoted the fact that it won't allow substitutions on its artisan pizzas such as Chicken & Bacon Carbonara pizza. It has also been expanding overseas and opened about 111 international locations during the quarter. Net income rose to $28.1 million, or 47 cents per share, for the three months ended June 17 from $25.2 million, or 40 cents per share last year. The latest results matched analyst expectations, according to FactSet. The company repurchased and retired 1.1 million shares and ended the quarter with 59.4 million shares outstanding. Cost of sales fell about 5 percent during the quarter. Revenue fell 2 percent to $376.1 million from $384.9 million last year. Analysts expected net income of $388.3 million. Revenue fell due partly to the sale of some company owned stores in 2011, as well as the stronger dollar, which hurts overseas revenue. But revenue in stores open at least one year told a stronger story. The measure rose 1.7 percent domestically and 5.7 percent internationally. The measure is a key gauge of a retailer's fiscal health because it excludes stores that open or close during the year. Founded in 1960, Domino's operates a network of 9,810 franchised and company-owned stores in the U.S. and 70 countries worldwide. Its shares rose 51 cents, or 1.6 percent, to $32.50 in premarket trading. Published: Thu, Jul 26, 2012