Domino's Shares Hit New High On First US Same-Store Sales Beat In A Year
Domino's Pizza Inc's shares soared 25% to a record high after the pizza chain comfortably beat quarterly US same-store sales and profit estimates, benefiting from its focus on faster delivery and new...
Domino's Pizza Inc's shares soared 25% to a record high after the pizza chain comfortably beat quarterly US same-store sales and profit estimates, benefiting from its focus on faster delivery and new promotions.
The company has been opening stores, adding new menu items and offering faster delivery to fight competition from rival pizzerias, mom-and-pop stores and aggregators such as Uber Eats and GrubHub, which deliver a variety of food to diners' doorsteps.
As a part of these efforts, Domino's offered half off on menu-priced pizzas for online orders during the cyber Monday week and also expanded its GPS delivery tracking technology across its US stores during the reported quarter.
"We certainly still saw a lot of aggregator, promotion and advertising activity out there," CEO Ritch Allison told analysts on a post earnings call. "But a lot of the things we did internally worked nicely in the quarter."
Sales at its established US restaurants rose 3.4% in the fourth quarter, beating estimates for the first time in over a year. Analysts had projected a rise of 2.3%, according to IBES data from Refinitiv.
"[The same-store sales rise] should meaningfully improve investor sentiment as trends suggest its domestic pizza delivery market share is being well defended and expanding," Guggenheim Partners analyst Matthew DiFrisco said.
RBC Capital Markets analyst Christopher Carril noted that this was the first sequential quarter-over-quarter rise in US comparable sales in almost two years, which he said is "encouraging and evidence that incremental headwinds from said competition may be subsiding."
However, international same-store sales at Domino's rose 1.7%, missing estimates of a 2.09% rise.
Net income rose 15.8% to $129.3 million from a year earlier.
On an adjusted basis, the company earned $3.13 per share, 15 cents above expectations.
Total revenue rose 6.3% to $1.15 billion, beating estimates of $1.13 billion.