Dominos Pizza on Monday maintained its annual sales forecasts, but said a challenging macroeconomic environment continued to weigh on consumers and heighten competition.
The company’s shares were up about 2 per cent at $328.34 in afternoon trading, paring earlier gains of nearly 7 per cent in premarket trading after Domino’s posted quarterly revenue that topped Wall Street estimates.
Domino’s continues to expect fiscal 2026 U.S. comparable sales and international sales growth in the low single digits, compared with analysts’ expectations for growth of 1.28 per cent and 0.95 per cent, respectively.
The competitive pressure spans the broader QSR category, not just pizza, and is expected to persist through the rest of the year, Domino’s retiring CEO Russell Weiner said on the post earnings call.
Restaurant chains have faced an uneven demand environment this year as inflation-weary consumers cut back on discretionary spending and increasingly seek value deals.
The pressure has intensified competition across the quick-service restaurant industry, forcing companies such as Domino’s to lean on promotions and lower-priced offerings to drive traffic.
“Domino’s results suggest the business is holding up better than investors feared, but we think that the recovery is still fragile,” said Lale Akoner, global market strategist at etoro.
Domino’s posted its slowest U.S. same-store sales growth in five quarters, with comparable sales rising just 0.1 per cent in the quarter ended June 14, missing analysts’ expectations for a 0.62 per cent increase, according to LSEG data.
In the last 12 months, the company has also lost nearly a third of its value.
Overall, second-quarter revenue rose 4.3 per cent to $1.19 billion, slightly above estimates of $1.18 billion, helped by a 6.5 per cent rise in quarterly supply-chain revenue to $731.7 million.
Supply-chain revenue rose on higher store order volumes and a 2.2 per cent increase in food-basket pricing, reflecting modest ingredient inflation passed to franchisees.
“I believe order growth is the most important driver of long-term success in our business,” Weiner said in a statement, adding that order volumes rose despite weak industry demand.
Domino’s cost of sales rose 4.7 per cent to $716.2 million from a year ago. Quarterly profit came in at $4.07 per share, below estimates of $4.17 per share.
(Reporting by Anuja Bharat Mistry and Shania S Thomas in Bengaluru; Editing by Tasim Zahid)
