(Bloomberg) -- Domino’s Pizza Inc. posted sales growth in the U.S. last quarter, a sign its strategy to get closer to customers is paying off. The shares rose in early trading.

• U.S. same-store sales climbed 3.4% in the fourth quarter that ended Dec. 29, the company said Thursday, topping analysts’ average estimate for 2.1% growth, according to Consensus Metrix.

Key Insights

• The chain already has 6,000 locations in a U.S. market that’s overly saturated with restaurants. Still Domino’s has been quickly expanding -- pouncing on the so-called fortressing strategy -- to offer easier carryout and faster delivery than rivals. It added a net 141 units last quarter in the U.S.
• Domino’s also reported profit and revenue that beat estimates, and its operating margin expanded from a year earlier. Excluding some items, profit was $3.13 a share last quarter, compared with estimates for $2.98. Still, the company is facing some pressure from higher food and labor costs.
• Like other restaurant companies with exposure to China, the chain may see an impact from the coronavirus outbreak there. It said last month that its franchisee in China is taking extra precautions. While Domino’s has just 274 locations there now, it has named the market as one of its key growth areas. Domino’s international same-store sales rose 1.7%, short of the 2% growth analysts had seen.

Market Reaction

• The shares rose as much as 16% in premarket trading. They’ve gained 1.1% this year through Wednesday’s close, trailing the 4.8% gain in the S&P 500 Index.
• For the company statement, click here.

To contact the reporter on this story: Leslie Patton in Chicago at lpatton5@bloomberg.net

To contact the editors responsible for this story: Sally Bakewell at sbakewell1@bloomberg.net, Lisa Wolfson, Jonathan Roeder

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