Domino’s Pizza U.S. same-store sales miss estimates, shares fall 6%

Domino’s Pizza U.S. same-store sales miss estimates, shares fall 6%

A Domino’s Pizza restaurant is seen in Los Angeles, California, U.S. July 18, 2018. REUTERS/Lucy Nicholson

(Reuters) – Domino’s Pizza Inc (DPZ.N) on Tuesday reported second-quarter same-store sales at its U.S. outlets that grew slower than expected as it faced fierce competition from rival pizza chains and third-party delivery companies, sending its shares down about 6% before the bell.

Food delivery apps like UberEats, DoorDash and GrubHub Inc (GRUB.N) have been offering more food options and attractive discounts, aggressively pushing into the restaurant delivery business where Domino’s has been a dominant player for years.

Domino’s strategy to beat competition has been to speed up delivery time by rapidly opening more stores near existing ones. But it has come at a cost – a slowdown in same-store sales in the short term.

Same-store sales at company-owned U.S. outlets grew 2.1%, while those at U.S. franchise stores rose 3.1% in the quarter ended June 16.

Analysts on average had expected it to rise 3.15% at company-owned U.S. stores and 4.69% at franchise stores, according to IBES data from Refinitiv.

“As a work-in-progress brand, we are constantly striving to improve in needed areas,” Chief Executive Officer Ritch Allison said in a statement.

Total revenue rose 4.1% to $811.6 million in the quarter but missed expectations of $836.6 million.

International same-store sales climbed 2.4%, in line with expectations.

Net income rose to $92.4 million, or $2.19 per share, from $77.4 million, or $1.78 per share, a year earlier. Analysts were expecting the Ann Arbor, Michigan-based company to earn $2.02 per share.

Reporting by Aishwarya Venugopal and Soundarya J in Bengaluru; Editing by Arun Koyyur

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