Last Updated: July 28. 2010 10:12AM .

Domino's bakes up hot second-quarter profit

Jaclyn Trop / The Detroit News

Domino's Pizza reported a double-digit profit gain for the second quarter, boosted by its new pizza recipe and a rise in casual dining.

The Ann Arbor-based pizza-maker's profits were up 55.7 percent to $22.6 million because of domestic and international sales and store growth, and a lower interest expense. Earnings per share rose 57 percent to 33 cents.

Domino's revenue rose 14.5 percent for the quarter, including franchise royalties and sales from the company's supply chain arm. Same store sales, which include about 450 corporate stores and 5,000 franchises, increased 8.8 percent.

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International same store sales grew 6.2 percent for the 66th consecutive quarter of positive sales.

"Honestly, we're a standout in the restaurant industry now," said CEO Patrick Doyle.

The pizza-maker introduced a new configuration with more flavorful cheese, sauce and crust last year, following several quarters of flat domestic sales. It helped improve profits 3.2 percent in the first quarter, while sales increased 14.3 percent, setting the stage for the second-quarter success.

The revised recipe, "supported with a very aggressive marketing campaign," is key to Domino's success this quarter, said Matt DiFrisco, an analyst with Oppenheimer in New York.

There is also evidence of a recovery in the pizza sector, which lifted competitors Pizza Hut and Papa John's as well, DiFrisco added.

Doyle said he is bullish on Domino's future.

"We've proven that even in these times that if you have a really great differentiated product, you can do really well," he said. "We feel very good about where we are."

From The Detroit News: http://detnews.com/article/20100728/BIZ ... z0vUJPKqMP