Domino's Pizza 1Q profit rises on revamped pizza

ANN ARBOR, Mich.

Domino's Pizza Inc. said Tuesday that its first-quarter profit climbed as traffic improved mainly because customers continued to respond to its revamped pizza.

The chain started promoting its new pie, which has a new sauce and cheese combination as well as a flavored crust, in December.

Domino's executives have said that the company decided to start overhauling its recipes after mounting criticism from focus groups and on social media sites. The company said in a series of documentary-style advertisements that under its old recipe, customers complained its crust tasted like cardboard and its sauce was reminiscent of ketchup.

"A remarkably better pizza, and our honesty in how we told consumers about it, is paying off with a revitalized overall category," President and CEO J. Patrick Doyle said in a statement.

In the first quarter, Domino's earnings rose 3 percent to $24.5 million, or 41 cents per share, from $23.8 million, or 41 cents per share, a year ago.

Excluding a gain of 6 cents per share related to a debt extinguishment, profit was 35 cents per share in the latest quarter.

The performance surpassed the 33 cents-per-share forecast of analysts polled by Thomson Reuters. Analyst estimates typically exclude one-time items.

Revenue for the period ended March 28 increased 18 percent to $381.1 million from $321.8 million on improvements both domestically and abroad. This topped Wall Street's estimate of $354.5 million.

Sales at U.S. stores open at least a year climbed 14.3 percent on better traffic and rose 4.2 percent overseas.

The metric is a key indicator of a restaurant operator's performance because it measures growth from existing stores rather than newly opened ones.

But the pizza maker's stock fell $1.85, or 11.5 percent, to $14.21 in afternoon trading as stock markets worldwide dropped on fears that Europe's attempt to contain Greece's debt crisis would fail. Domino's shares have ranged from $7.05 to $16.32 over the past year.

Domino's runs 9,036 franchised and company-owned stores in the U.S. and more than 60 international markets.