Domino’s Pizza missed same-store sales estimates for the first quarter on Monday, as higher living costs tied to ongoing geopolitical and economic uncertainties prompted budget-strained customers to cut discretionary spending, including dining out.
Shares of the pizza giant, which posted its first quarterly U.S. sales miss in a year, fell five per cent in premarket trading.
Already squeezed by high inflation and a weak labor market, consumers now face fresh pressures as Middle East tensions drive up transportation costs that threaten to further increase food prices, accelerating a shift toward lower-cost, at-home meals and dampening sales across restaurant and fast-food chains.
Domino’s, which also announced a US$1 billion share buyback program, posted quarterly U.S. same-store sales growth of 0.9 per cent, missing analysts’ average estimate of a 2.72 per cent rise, according to data compiled by LSEG. Sales were down about 0.5 per cent a year ago.
The company posted a 0.4 per cent decline in quarterly international same-store sales, also missing the estimate of a 0.7 per cent rise.
“The firm delivered positive transaction growth, but the weak figure likely reflects the discount intensity needed to lure consumers,” Ari Felhandler, analyst with Morningstar, said.
To attract value-focused customers, Domino’s has revived its $9.99 “Best Deal Ever,” alongside offers such as “Mix and Match” and “Emergency Pizza,” as well as rolled out items such as a Parmesan-stuffed crust pizza.
In February, the company had said it expects U.S. same-store sales to grow by 3% in fiscal 2026, similar to last year, with growth higher in the first half than in the second.
Domino’s per-share earnings fell to $4.13 for the quarter ended March 22, from $4.33 a year ago, weighed down by a $30 million pre-tax charge related to investment in DPC Dash, a holding company that is primarily engaged in operations of fast-food restaurant chains. Analysts estimated a profit of $4.27 per share.
(Reporting by Anuja Bharat Mistry in Bengaluru; Editing by Shilpi Majumdar)
