Domino’s Pizza on Tuesday scaled back its full-year sales outlook, warning that U.S. and international comparable sales growth would remain muted, sending shares down about 3 per cent in early trading.
The pizza giant has reported slowing comparable sales for several quarters running, squeezed by rising competition, persistent inflation and a softening US labor market that have made consumers increasingly cautious about discretionary spending.
Here are some details:
- “We expect the macro environment to remain an overhang on the consumer through the balance of the year,” CEO Joe Jordan, who joined earlier this month, said on a post earnings call
- Demand remains challenging across the quick-service restaurant and pizza industry, Jordan added.
- Jordan said the company aims to restore profit and order-count growth while expanding its competitive reach beyond the traditional quick-service pizza market.
- Domino’s now expects US same-store sales to be towards the low end of low-single-digit growth forecast.
- The key test for the new CEO is driving order growth through promotions and new products without hurting franchisee profitability, said Lale Akoner, an analyst at eToro.
- Its annual international comparable sales are expected to be about flat, compared with prior forecast of low-single-digit growth.
- Domino’s posted quarterly US same-store sales growth of 0.3 per cent, below analysts’ estimates of a 0.71 per cent rise, according to data compiled by LSEG.
- Its quarterly international same-store sales grew 0.2 per cent, versus estimates of 0.88 per cent rise.
- However, Domino’s posted quarterly revenue of US$1.19 billion and profit of US$4.60 per share, both topping estimates of US$1.18 billion and US$4.37 per share, respectively.
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Reporting by Anuja Bharat Mistry in Bengaluru; Editing by Tasim Zahid
