Domino’s in Denmark
Domino’s Pizza shares were down more than 3% in premarket trading after the pizza chain’s third-quarter revenue fell short of estimates and its U.S. same-store sales turned negative.
The pandemic brought skyrocketing demand for Domino’s pizza in its home market, but as consumers were vaccinated and states relaxed restrictions, investors began to worry about pizza fatigue. Last quarter, despite facing tough comparisons, U.S. same-store sales still rose 3.5%.
The company’s third quarter seems to be the turning point. U.S. same-store sales shrank by 1.9%, although the metric was up by 15.6% on a two-year basis. StreetAccount estimates forecast that the company would report U.S. same-store sales growth of 1.8%.
The decline in U.S. demand led the pizza chain to fall short of Wall Street’s revenue estimates. Analysts surveyed by Refinitiv were expecting net sales of $1.04 billion, but Domino’s reported $998 million in revenue for the quarter.
Outside the U.S., the company’s business is faring much better. International same-store sales climbed 8.8% in the quarter, up 15% on a two-year basis.
Domino’s earned $3.24 per share during the quarter, topping the $3.11 per share expected by analysts surveyed by Refinitiv.
Although Domino’s shares were down more than 5% at one point on Thursday, the stock has climbed 19% this year, bringing its market value to $17 billion.