By Juveria Tabassum (Reuters) -Domino’s Pizza on Monday posted a surprise decline in first-quarter same-store sales in its biggest market, as elevated inflation and economic uncertainty hit consumer appetite for restaurant food. Restaurant traffic slowed in February and March as consumer sentiment weakened, mainly due to President Donald Trump’s erratic trade policy, which has fanned […]
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Domino’s Pizza US sales dip as inflation, economic uncertainty hurt demand
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By Juveria Tabassum
(Reuters) -Domino’s Pizza on Monday posted a surprise decline in first-quarter same-store sales in its biggest market, as elevated inflation and economic uncertainty hit consumer appetite for restaurant food.
Restaurant traffic slowed in February and March as consumer sentiment weakened, mainly due to President Donald Trump’s erratic trade policy, which has fanned fears of a recession in the United States.
The company’s U.S. delivery business also took a hit as lower-income consumers tempered spending, executives said on a post-earnings call.
The world’s largest pizza chain’s same-store sales in the U.S. fell 0.5%, compared with analysts’ average estimate of a 0.5% rise, according to data compiled by LSEG.
Shares of the company fell about 1% in early trading.
Domino’s reiterated its 3% annual growth target for U.S. comparable sales, but said if the current economic uncertainty persisted, it could prevent the company from achieving its target.
Despite a tough and competitive environment, Domino’s is “well positioned to shift to positive comparable sales in the US in the second half of the year,” said Northcoast Research analyst Jim Sanderson.
The company expects demand to pick up in the second half of the year, helped by its partnership with DoorDash that will allow users to place orders through the aggregator platform once the service kicks off in May, and its newly launched parmesan-stuffed crust pizza.
However, geopolitical volatility could hit international demand and impact the company’s annual global comparable sales growth target of 2%, executives said.
For the first quarter ended March 25, Domino’s posted earnings per share of $4.33, ahead of analysts’ average estimate of $4.07.
U.S. company-owned store gross margin fell to 16% from 17.5% a year ago, hurt by higher food prices.
International same-store sales jumped 3.7%, beating analysts’ estimate of 1.93% growth.
(Reporting by Juveria Tabassum in Bengaluru; Editing by Shinjini Ganguli)