(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)