Domino's Same-Store Sales At Company-Owned US Outlets Miss Estimates
Domino's Pizza Inc has missed Wall Street estimates for quarterly same-store sales growth in the United States, hurt by growing competition from food delivery startups and rival pizzerias.
Same-store sales at company-owned US outlets grew 2.1%, widely missing the average estimate of 4.02%, according to IBES Refinitiv data.
The popular pizza chain has been facing intense competition from delivery services such as GrubHub Inc and UberEats, which offer a wide range of cuisines from a variety of restaurants.
To claw back some market share, Domino's has been aggressively growing its store count by opening more small-format outlets with less seating to deliver faster by bringing delivery areas tighter and closer together.
The company has about 16,000 outlets worldwide and aims to grow to its portfolio to 25,000 stores by the end of 2025.
The multiple store strategy, termed fortressing, has helped Domino's improve the quality and speed of its delivery, but skewed sales towards newer outlets, hitting same-store sale comparisons and also overcrowding the market.
Sales, Net Income And Revenue
Domino's said US comparable sales fell between one and 1.5 points in 2018, but that it was willing to make the investment for long-term growth.
International same-store sales for the company were also weak, rising only 1.8%, well below the estimate of 2.43%.
"We remain focussed on improving international comps," CEO Ritch Allison said in a statement.
Net income rose to $92.7 million, or $2.20 per share, in the first quarter ended March 24, from $88.8 million, or $2 per share, a year earlier.
Total revenue rose 6.4% to $836 million, but missed Wall Street's forecast of $849.6 million.