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Domino's Reports Faster Sales Growth in Q3

By Demitri Kalogeropoulos – Oct 8, 2020 at 9:01AM

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Revenue growth sped up at home and in international markets through early September.

The demand for pizza delivery continues to rise even as the global pandemic stretches on. On Thursday, Domino's Pizza (DPZ -0.39%) announced accelerating sales gains for the third-quarter period that ran through early September. The delivery leader paired that success with surging profits.

Sales sped up both in the U.S. market (from 16.1% to 17.5%) and internationally (from 1.3% to 6.2%) as consumers continued to direct spending toward the convenience of home delivery. Yet that U.S. metric left room for rival Papa John's International to close the market share gap, given that it last reported 18% growth through late September.

Young friends sharing a delivered pizza.

Image source: Getty Images.

Domino's finances reflected its healthy growth position, with earnings rising 21.5% to $2.49 per share. The company posted a modest drop in operating profit margin due to rising costs including labor and COVID-19 safety spending. But free cash flow remained strong at over $319 million so far in 2020.

CEO Ritch Allison and his team sounded an optimistic tone about their momentum as they close out the year and look ahead to a 2021 that is likely to see weak restaurant industry trends.

Despite that challenge, Domino's seems eager to continue padding its sales lead by adding more locations in the U.S. market and internationally. It has put an additional 728 stores into operation over the last 12 months to push its global count over 17,000.

Demitri Kalogeropoulos has no position in any of the stocks mentioned. The Motley Fool recommends Domino's Pizza. The Motley Fool has a disclosure policy.

Stocks Mentioned

Domino's Pizza Stock Quote
Domino's Pizza
$381.26 (-0.39%) $-1.50
Papa Johns International Stock Quote
Papa Johns International
$82.42 (-0.84%) $0.70

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