Domino’s Pizza Misses Revenue Estimates As Higher Prices Squeeze Demand
Domino’s Pizza missed Wall Street estimates for second-quarter revenue on Monday 24 July, as elevated delivery fees and higher prices to boost margins hurt demand for its pizzas and chicken wings.
Shares of the world’s largest pizza chain dropped 4% in pre-market trading on Monday 24 July as Domino’s said it saw lower order volumes during the quarter.
Higher labor and raw material costs have forced restaurant chains, even the biggest names including McDonald’s, to jack up menu prices and delivery fees, which hurt cost-conscious consumers whose budgets are already squeezed by sticky inflation.
Get a FREE Digital Subscription!
Enjoy full access to Hospitality Irelandour weekly email news digest, all website and app content, and every digital issue.
Domino’s US same-store sales rose 0.1% in the second quarter, compared with analysts’ estimates of an about 0.2% increase.
In a bid to boost its sluggish delivery business, the pizza maker partnered with Uber earlier in July, which will allow its customers to place order on the ride-sharing company’s food delivery apps Uber Eats and Postmates.
The service will be rolled out in four pilot markets in the US in the fall.
“Over two-thirds of our stores around the world will have the ability to take orders from Uber Eats,” Domino’s CEO Russell Weiner said in a statement on Monday 24 July.
Domino’s total revenue fell 3.8% to $1.02 billion in the three months ended 18 June, compared with analysts’ estimate of $1.07 billion, according to Refinitiv IBES data.
But the fast-food chain reported a profit of $3.08 per share, above Refinitiv estimate of $3.05.
The above news followed the following alert, published on Wednesday 19 July:
DOMINO’S PIZZA SHARES UP 1% AFTER TWO BROKERAGES RAISE PRICE TARGET
Read more: Domino’s Pizza Group Names New CEO
News by Reuters, edited by Hospitality Ireland. Click subscribe to sign up for the Hospitality Ireland print edition.