Domino’s Is Set To Grow

Article Excerpt

DOMINO’S PIZZA $17.56 (New York symbol DPZ; SI Rating: Average)(734-930-3030; www.dominos.com; Shares outstanding: 62.8 million; Market cap: $1.1 billion) completed its recapitalization plan earlier this year. This included refinancing its existing debt to take advantage of lower interest rates, and taking on $1 billion in new debt to buy back shares and pay a special dividend of $13.50 a share. In the three months ended June 30, 2007, Domino’s revenues rose 3.8%, to $340.3 million from $347.7 million. Excluding one-time recapitalization expenses, earnings per share fell 17.6%, to $0.28 from $0.34. The earnings decline came mostly from higher interest expenses on the additional debt. Domino’s debt now stands at $1.7 billion, up from $740 million a year earlier. Higher labor, energy, transportation costs, as well as increased prices for commodities such as cheese and beef also hurt earnings. Domino’s continues to implement marketing and operating programs to improve its sales in the United States. There’s also lots of room for expansion in international…

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