Dominoes in Denmark
Domino’s Pizza stocks declined more than 3% in pre-trading hours after the pizza chain’s third-quarter sales fell below estimates and U.S. sales in the same store turned negative.
The pandemic sparked an exploding domestic market demand for Dominos pizza, but as consumers were vaccinated and restrictions eased, investors became concerned about pizza fatigue. In the last quarter, sales in the US still rose 3.5% despite difficult comparisons.
The company’s third quarter appears to be the turning point. US sales in the same store decreased 1.9%, although the metric increased 15.6% on a two-year basis. StreetAccount estimates that the company would report 1.8% sales growth in the same store in the US.
The decline in US demand resulted in the pizza chain falling short of Wall Street’s sales estimates. Analysts polled by Refinitiv expected net sales of $ 1.04 billion, but Domino reported sales of $ 998 million for the quarter.
Outside of the US, the company’s business is doing much better. International same-store sales increased 8.8% for the quarter, up 15% on a two-year basis.
Dominos earned $ 3.24 per share for the quarter, beating the $ 3.11 per share forecast by analysts surveyed by Refinitiv.
Though Domino stock was down more than 5% at one point on Thursday, the stock is up 19% this year, bringing its market value to $ 17 billion.
Read the Domino press release.