Domino’s forecasts muted annual same-store sales as competition, cautious consumers weigh on demand

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Domino’s Pizza on Tuesday scaled back its full-year sales outlook, warning that U.S. and international comparable sales growth would remain muted, sending shares down about 3 per cent in early trading.

The pizza giant has reported slowing comparable sales for several quarters running, squeezed by rising competition, persistent inflation and a softening US labor market that have made consumers increasingly cautious about discretionary spending.

• Latest updates on company news here

Here are some details:

• “We expect the macro environment to remain an overhang on the consumer through the balance of the year,” CEO Joe Jordan, who joined earlier this month, said on a post earnings call
• Demand remains challenging across the quick-service restaurant and pizza industry, Jordan added.
• Jordan said the company aims to restore profit and order-count growth while expanding its competitive reach beyond the traditional quick-service pizza market.
• Domino’s now expects US same-store sales to be towards the low end of low-single-digit growth forecast.
• The key test for the new CEO is driving order growth through promotions and new products without hurting franchisee profitability, said Lale Akoner, an analyst at eToro.
• Its annual international comparable sales are expected to be about flat, compared with prior forecast of low-single-digit growth.
• Domino’s posted quarterly US same-store sales growth of 0.3 per cent, below analysts’ estimates of a 0.71 per cent rise, according to data compiled by LSEG.
• Its quarterly international same-store sales grew 0.2 per cent, versus estimates of 0.88 per cent rise.
• However, Domino’s posted quarterly revenue of US$1.19 billion and profit of US$4.60 per share, both topping estimates of US$1.18 billion and US$4.37 per share, respectively.

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Reporting by Anuja Bharat Mistry in Bengaluru; Editing by Tasim Zahid