(Reuters) -Domino’s Pizza beat expectations for quarterly profit and U.S. same-store sales on Tuesday, driven by promotions and new menu items as consumers tighten their budgets amid economic uncertainty. Persistent inflation and repeated menu price hikes have prompted consumers to prioritize value when dining out or ordering in, and move to smaller pack sizes for […]
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Domino’s Pizza tops quarterly results estimates as US consumers seek value meals
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(Reuters) -Domino’s Pizza beat expectations for quarterly profit and U.S. same-store sales on Tuesday, driven by promotions and new menu items as consumers tighten their budgets amid economic uncertainty.
Persistent inflation and repeated menu price hikes have prompted consumers to prioritize value when dining out or ordering in, and move to smaller pack sizes for snacks.
Sales in the restaurant industry were beginning to slow, CFO Sandeep Reddy said on a post-earnings call. The company’s shares pared some premarket gains and were up nearly 2% in early trading.
“We think the timing of Domino’s fiscal quarter supported sales growth as the macro slowdown in restaurant spending has grown more acute in September,” said Matt Goodman, analyst at M Science.
Still, Domino’s efforts such as its $9.99 pizza offer, which was revived in August, and fresh items like parmesan-stuffed-crust pizza have helped cater to consumers who have curtailed spending, and drive demand.
Domino’s said it had stuck with the $9.99 pizza deal longer than it had planned as it helped drive demand at stores.
Its partnership with DoorDash was also helping attract more customers for food delivery, and would help boost sales in the U.S. through next year, CEO Russell Weiner said.
U.S. same-store sales for the world’s largest pizza chain rose 5.2% in the quarter, beating analysts’ expectations of a 4.0% increase, according to LSEG data.
Domino’s has been rolling out more deals under its rewards program as it faces rising competition from fast-food chains like McDonald’s and Burger King, which have introduced steep discounts to draw in diners.
Its earnings per share for the quarter ended September 7 were $4.08, beating estimates of $3.97, helped by higher order volumes.
International same-store sales rose 1.7%, missing estimates of a 1.9% rise, as demand remained choppy in markets like Japan and Australia.
U.S. company-owned store gross margin fell 0.5 percentage point from a year earlier, hit by high commodity prices like cheese and pork.
(Reporting by Anshi Sancheti and Juveria Tabassum in Bengaluru; Editing by Leroy Leo and Shilpi Majumdar)