Domino’s Pizza posts quarterly sales miss on muted fast-food demand
6:35 am Thursday, July 18th, 2024
(Reuters) -Domino’s Pizza fell short of estimates for quarterly same-store sales on Thursday, as inflation worries discouraged U.S. consumers, particularly in the lower-income group, from eating out or ordering in, sending its shares down 11% in premarket trading.
Sequentially slower growth in food services in June showed consumers were still looking to stretch their budgets as they recovered from high inflation, despite a better-than-expected overall U.S. retail sales report signaling economic resilience.
Domino’s U.S. same-store sales growth of 4.8% in the quarter fell just short of expectations of 4.91% growth, according to LSEG data.
The company has been catering to consumers looking for cheaper options through its refreshed loyalty program in the U.S. as well as several offers to draw in customers.
Analysts, however, had expected tougher competition for Domino’s this quarter, as fast-food peers also ramped up deals and promotions on their menu items.
Still, lower supply-chain costs and resilience in its same-store sales in the U.S. helped the world’s largest pizza maker earn a profit of $4.03 per share, compared with market expectations of $3.68.
“We had positive order counts in our delivery and carry-out businesses, and across all income cohorts. Our strategy is resonating with customers,” said Russell Weiner, Domino’s chief executive officer.
Domino’s reported total revenue of $1.10 billion in the second quarter, roughly in line with estimates.
The company maintained its long-term outlook of more than 7% annual global retail sales growth.
However, Domino’s suspended its long-term target of 1,100 global net stores after its Australia-based master franchise said earlier this week it was closing low-volume stores in Japan and France.
(Reporting by Juveria Tabassum; Editing by Vijay Kishore and Pooja Desai)
