Dominos pizza posted double-digit growth for the second consecutive quarter, driven by improved delivery demand due to the coronavirus pandemic in the third quarter.
While the pizza chain beat profitable expectations, health security spending detracted from the company’s profits as it missed profitable expectations.
CEO Ritch Allison, who said on “Bad money“After reporting results for the period ended September 6, the additional costs will become a reality in the near future.
“The reality is that in the coronavirus world we now live in, it is only more expensive to operate,” he told CNBC host Jim Cramer.
Domino had sales of $ 968 million and made $ 99 million in the three month period. These numbers increased by 17.9% and 15% respectively compared to the same quarter of the previous year. Sales in the same store improved by 17.5%.
The company surpassed Wall Street sales expectations but fell 30 cents short of estimated earnings per share at $ 2.49.
The stock, which is up more than 36% this year, fell 7% on the trading day to close at $ 401.01.
The pandemic costs Domino endured included spending on protective equipment and cleaning supplies to help contain the spread of Covid-19 in its restaurants. The company has also added more wages and sick pay to employee plans, Allison said.
Cheese, which is a key ingredient in pizza cakes, also contributed to higher costs as prices rose over the summer, he added.
“Combine that with an increase in the price of cheese over the summer and we saw some cost pressures in the short term,” he said. “But in the long run, we will continue to focus on getting that top line. Some of those Covid-related costs are sure to come down in the long run.”