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Domino's Pizza U.S. same-store sales miss estimates, shares fall 6%

Domino's Pizza U.S. same-store sales miss estimates, shares fall 6%
A Domino's Pizza restaurant is seen in Los Angeles, California, U.S. July 18, 2018. REUTERS/Lucy Nicholson   -   Copyright  LUCY NICHOLSON(Reuters)
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(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)

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