The FINANCIAL -- Domino's Pizza, Inc. announced results for the fourth quarter and fiscal 2017, comprised of strong growth in same store sales, global store counts and earnings per share.
Domestic same store sales grew 4.2% during the quarter versus the year-ago period, and 7.7% for the full year, continuing the positive sales momentum in the Company's domestic business. The international division also posted positive results, with same store sales growth of 2.5% during the quarter and 3.4% for the full year. The fourth quarter marked the 96th consecutive quarter – or 24th year – of positive international same store sales growth and the 27th consecutive quarter of positive domestic same store sales growth. The Company also had fourth quarter global net store growth of 422 stores, comprised of 96 net new domestic stores and 326 net new international stores. In fiscal 2017, the Company opened 1,045 net new stores, comprised of 216 net new domestic stores and 829 net new international stores, according to Domino's Pizza.
Fourth quarter diluted EPS was $2.09, up 41.2% over the prior year quarter; fiscal 2017 diluted EPS was $5.83, up 35.6% over the prior year. Fiscal 2017 diluted EPS, as adjusted, was $5.91, up 37.4% over the prior year diluted EPS of $4.30.
On February 14, 2018, the Board of Directors declared a 55-cent per share quarterly dividend for shareholders of record as of March 15, 2018 to be paid on March 30, 2018. This represents an increase of approximately 20% over the previous quarterly dividend amount.
"Without question, we are pleased with our fourth quarter and full-year 2017 performance – with results that continued to outpace the industry," said J. Patrick Doyle, President and Chief Executive Officer. "Our 2017 global retail sales growth and domestic comps outperformed the high-end of our stated three to five-year outlook. This, along with tremendous net store growth and an incredibly low number of closures, helps validate that our long-term fundamental strength is well intact heading into 2018."
Revenues were up 8.8% for the fourth quarter versus the prior year quarter, due primarily to higher supply chain revenues from increased volumes. Higher royalties derived from our retail sales in both our international and domestic markets also contributed to the increase in revenues. Consolidated revenues also benefited from the positive impact of foreign currency exchange rates.
Net Income increased 28.3% for the fourth quarter versus the prior year quarter, primarily driven by an increase in global royalty revenues as well as higher supply chain volumes. The adoption of the new equity-based compensation accounting standard also positively impacted net income by approximately $6.8 million. Additionally, the pre-tax gain on the sale of certain domestic Company-owned stores to franchisees in the fourth quarter resulted in a $4.0 million decrease to our consolidated general and administrative expenses. These increases were partially offset by a pre-tax $5.3 million increase in net interest expense for the fourth quarter as compared to the prior year as a result of higher net debt levels following our 2017 recapitalization transaction.
Diluted EPS was $2.09 for the fourth quarter versus $1.48 in the prior year quarter. This represents a 61-cent or 41.2% increase over the prior year quarter. This increase was driven by higher net income, as well as lower diluted share count, primarily resulting from share repurchases.
Adoption of New Accounting Guidance
The Company adopted ASU 2016-09 in the first quarter of fiscal 2017. This standard addresses accounting for income taxes and forfeitures and the cash flow presentation of share-based compensation. The adoption resulted in a $6.8 million decrease in our fourth quarter 2017 provision for income taxes, or a 5.0 percentage point decrease in our fourth quarter 2017 effective tax rate, due primarily to the recognition of excess tax benefits for options exercised. For fiscal 2017, the adoption resulted in a $27.2 million decrease in our provision for income taxes, or a 6.8 percentage point decrease in our effective tax rate. This item positively impacted our diluted EPS by approximately 15 cents and 57 cents in the fourth quarter and fiscal 2017, respectively. Refer to the Company's Form 10-K for the fiscal year ended December 31, 2017 for additional information regarding the impact of the adoption of ASU 2016-09.
In the first quarter of fiscal 2018, the Company will adopt Accounting Standards Codification 606, Revenue from Contracts with Customers ("ASC 606"). Under this new accounting standard, the Company has determined that there are not separate performance obligations associated with the franchise advertising contributions received by Domino's National Advertising Fund ("DNAF") and, as a result, these franchise contributions and the related expenses will be presented gross in the Company's consolidated statement of income. The Company expects this change to have a material impact on its total revenues and expenses beginning in fiscal 2018. However, this impact will generally be an offsetting increase to both revenues and expenses such that the impact on income from operations and net income, if any, is not expected to be material. The Company will also present the activity associated with DNAF on a gross basis in the statement of cash flows beginning in fiscal 2018. Refer to the Company's Form 10-K for the fiscal year ended December 31, 2017 for additional information regarding the anticipated impact of adoption of ASC 606.
Tax Cuts and Jobs Act
On December 22, 2017, the Tax Cuts and Jobs Act (the "2017 Tax Act") was enacted. The 2017 Tax Act includes many changes to existing U.S. tax laws that impact the Company, most notably a reduction of the U.S. corporate income tax rate from 35 percent to 21 percent for tax years beginning after December 31, 2017. While the impact of the 2017 Tax Act was not material to the Company's 2017 financial statements, based on preliminary estimates, we anticipate it will significantly lower our effective tax rate in future periods. Refer to the Company's Form 10-K for the fiscal year ended December 31, 2017 for additional information regarding the impact of the 2017 Tax Act.
During the fourth quarter, the Company repurchased and retired 937,026 shares of its common stock under its open market share repurchase program, including 659,807 shares received at final settlement of our previously disclosed $1.0 billion accelerated share repurchase program. The remaining 277,219 shares were repurchased and retired during the fourth quarter for approximately $51.5 million at an average price of $185.89 per share. During fiscal 2017, the Company repurchased and retired a total of 5,576,249 shares of its common stock for approximately $1.06 billion at an average price of $190.85 per share. The Company had approximately $198.5 million remaining under its $1.25 billion authorization for share repurchases as of December 31, 2017.
On February 14, 2018, the Board of Directors authorized a new share repurchase program to repurchase up to $750.0 million of the Company's common stock. This repurchase program replaces the remaining availability of approximately $198.5 million under the Company's previously approved $1.25 billion share repurchase program.