Domino's Pizza reports rise in profits

This story has been updated following a conference call with Domino's Pizza CEO Patrick Doyle.

Domino’s Pizza posted an 11.5 percent increase in profits in the second quarter of 2012, according to an earnings report released this morning.

The Ann Arbor Township-based chain reported a net income of $28.1 million for the quarter that ended June 17, up from $25.2 million during the same period in 2011.

Revenue fell to $376.1 million from $384.9 million last year. The reason, according to the report: "Lower domestic supply chain volumes, lower company-owned store revenues resulting from the sale of company-owned stores in 2011 and the negative impact on international royalties of changes in foreign currency exchange rates."

At stores open at least a year — a key measurement used to gauge a retailer's performance — Domino’s reported a sales increase of 1.7 percent domestically and 5.7 percent internationally.

The company continued to expand during the quarter, gaining three stores in the U.S. and 111 internationally. Domino’s now has 5,023 international stores and 4,901 domestic stores.

"We've posted another solid quarter, with robust international store growth,” said Domino’s CEO Patrick Doyle in a statement. “First half 2012 domestic store economics improved markedly versus last year, which we think contributed to a decrease in U.S. store closures. With a diversified base of nearly 10,000 locations around the globe, we drove steady demand for our brand and sales for our products worldwide."

The company’s international store count first exceeded its domestic store count last quarter — something Doyle called an “incredible milestone” for the company.

Doyle said in May he hopes Domino’s will hit 10,000 total stores in the near future.

"One of the great strengths of our international portfolio is that it is not greatly concentrated in any one geographical area," Doyle said during a conference call Tuesday morning.

He said some of the fastest growing international markets are in Brazil, Germany and Malaysia.

In the past few years, Domino's has reinvented its brand by rolling out several successful marketing campaigns and redesigning its pizza, helping to rake in $105.3 million in sales in its 2011 fiscal year. The 2011 sales marked a 19.8 percent increase over its 2010 fiscal year.

The company has continued to make series of menu changes, including introducing chicken products, adding artisan pizzas, redeveloping cheesy bread, adding parmesan bread bites and introducing a gluten-free pizza crust.

Founded in 1960, Domino's operates a network of 9,924 franchised and company-owned stores in the U.S. and 72 countries worldwide.

Following Domino’s earnings report, the company’s stock (NYSE: DPZ) was up 3.46 percent to $33.10 at 10:39 a.m.

Lizzy Alfs is a business reporter for AnnArbor.com. Reach her at 734-623-2584 or email her at lizzyalfs@annarbor.com. Follow her on Twitter at http://twitter.com/lizzyalfs.