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Domino's Pizza, Inc. (NYSE: DPZ) saw its Q3 profit drop by a staggering 55% as reported this morning. Domino's management explained the root causes as weak consumer spending added with cost pressures. Cost pressures? Apparently, either the cost of making pizza has changed big-time in the last three months, or gas prices and commodity food product prices have gone up. I'll take the latter -- you?

For the Q3 period, Domino's net income dropped to $10.99 million or $0.17 per share from $24.5 million or $0.39 per share in the year-ago quarter. Most analysts expecting about $0.23 EPS. The food company's quarterly revenue rose 3.2% to over $337 million as international sales became the star of the quarter. CEO David Brandon suggested that trying to mix increasing prices with declining traffic was a challenge in the quarter. Also mentioned was ... wait for it ... higher food costs. Milk prices (cheese) indeed went up, but at the butt-end of Q3, not during the whole period. Could this be an excuse?

While weak domestic consumer spending hampered sales, international sales did just the opposite, increasing 8.3% for the quarter. Have Domino's done enough in the Q3 period to goose more sales from customers, if that was even possible? I'll say that Papa John's International (NYSE: PZZA) advertised like crazy in my area this past quarter -- on television, newspapers and in other areas. I saw next to nothing from Domino's. I wonder if the company is masking "declining sales" with "losing business to the competition?"

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Domino's Pizza (DPZ) Q3 profit plunges 55 percent originally appeared on BloggingStocks on Tue, 16 Oct 2007 10:22:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>David BrandonDavidBrandondomino'sdomino's pizzaDomino'sPizzaDPZinthenewspapa John'sPapaJohn'spizzapzzaTue, 16 Oct 2007 10:22:00 EST