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Domino's profit gets a lift from new pan pizzas

ANN ARBOR, Mich. (AP) -- Domino's new pan pizzas helped lift its profit in the fourth quarter by 22 percent and company shares jumped to an all-time high Thursday.

The delivery chain, based in Ann Arbor, Mich., introduced the pan pizza this past September in a challenge to Pizza Hut, which has long sold the thicker variety of pies. At the time Domino's introduced its version, it said that pan pizzas account for one in every five pizzas sold in the country.

In a conference call with analysts Thursday, CEO Patrick Doyle pan pizza sales exceeded the company's expectations. Customers who were getting pan pizzas from competitors started "giving us some of their business," he said.

During the quarter, Domino's said sales at locations open at least a year rose 4.7 percent domestically, after a 6.8 percent increase in the year-ago period. That's an important measure because it strips out the impact of newly opened and closed locations.

Pizza Hut, which is owned by Yum Brands Inc., had said earlier this month that the figure fell 1 percent in the quarter, after a 6 percent increase a year earlier. And Papa John's said earlier this week that sales rose 5.2 percent domestically, after a 1.7 percent increase a year earlier.

Although he declined to provide specifics for the first quarter for the year so far, Doyle also said that Domino's wasn't seeing an impact from "anything that's happening with the government." The comments were in contrast to other restaurant companies, such as Olive Garden parent company Darden Restaurants Inc., that have said higher payroll taxes were taking a toll on sales.

"What happened in January didn't come as a surprise," Doyle said, noting that Domino's had already been focusing on value to prepare for the current economic climate.

Like Papa John's, Domino's is also enjoying growth overseas, with the sales figure up 5.2 percent at international locations. The company noted that growth was strong around the world, despite the rough economic conditions in many regions.

For the three months ended Dec. 30, Domino's Pizza Inc. earned $37.6 million, or 64 cents per share. That's compared with $30.9 million, or 52 cents per share, a year ago.

Total revenue rose 8 percent to $539.7 million.

Analysts on average expected a profit of 60 cents per share on revenue of $532.1 million, according to FactSet.

Although Domino's doesn't provide quarterly or annual earnings outlooks, the company said it expects domestic sales growth at established locations to grow between 1 percent and 3 percent over the long term, while international sales expected to grow 3 percent to 6 percent.

The company opened 513 new stores during the year, the vast majority of which were overseas. Domino's is based in Ann Arbor, Mich. and has about 5,000 stores in the U.S. and 5,300 stores overseas.

Shares rose 3 percent to $48.29 in afternoon trading, after reaching a new high of $48.72.