ANN ARBOR, Mich. (AP) — Pizza-delivery chain Domino's Pizza Inc. said Tuesday its first-quarter profit fell 24 percent, hurt by lower revenue and costs related to a debt recapitalization completed during the quarter.
Its results missed analysts' expectations, and its shares dropped $2.81, or 7.4 percent, to $35 in premarket trading.
Net income fell to $20.7 million, or 35 cents per share for the three months ended March 25. That is down from $27.1 million, or 43 cents per share, last year. The company said excluding costs related to completing a recapitalization of debt, its earnings amounted to 47 cents per share. That's still short of the 49 cents per share analysts expected, according to FactSet.
Revenue fell 1 percent to $384.6 million from $389.2 million last year. Analysts expected revenue of $406.1 million. Revenue was down partly from lower volume due to lower order counts at the store level, Domino's said. That was because deals during the quarter focused on side items, designed to improve profitability.
Revenue in restaurants open at least one year, a key measure of a restaurant chain's financial health, rose 2 percent domestically and 4.7 percent abroad.
The company opened 77 stores internationally during the quarter.
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. Its latest ad campaign promoted the fact that it won't allow substitutions on its artisan pizzas such as Chicken & Bacon Carbonara pizza.
Founded in 1960, Domino's operates a network of 9,810 franchised and company-owned stores in the U.S. and 70 countries worldwide.