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Domino's U.S. same-store sales fall for first time in a decade as demand slows
PUBLISHED ON 2021-10-14 09:53:00 EST Kathi
Domino's Pizza Inc posted on Thursday its first drop in U.S. same-store sales in over a decade, signaling a slowdown in delivery demand for the world's largest pizza chain as consumers move away from their pandemic food-ordering habits.
As COVID-19 curbs ease, Americans, who spent the last year ordering in, have started to eat out at restaurants, slowing sales at Domino's that gets most of its business from deliveries and take-away orders.
Same-store sales at the company's U.S. restaurants fell 1.9% during the reported quarter, compared with estimates of a 1.89% increase, according to IBES data from Refinitiv. Its U.S. same-store sales had jumped 17.5% a year ago.
Domino's performance could set the tone for earnings from other fast-food chains who benefited heavily during lockdowns, with customers now turning to traveling and dining outdoors.
A severe labor crunch in the United States also threatens businesses of fast-food chains, as a lack of workers could push restaurants to limit operating timings or capacity.
The bright spot in Domino's results was its international business, where same-store sales grew 8.8%, as customers globally continued to rely on food deliveries due to tougher COVID-19 curbs. Analysts had expected the growth to be 7.97%.
The pizza chain's total revenue rose 3.1% to $998 million in the third quarter, missing analysts' estimate of $1.04 billion.
Its net income rose 21.5% to $120.4 million or $3.24 per share in the quarter ended Sept. 12. Analysts on average expected a profit of $3.11 per share.
Shares of the company, which have risen more than 24% this year, were down about 3% at $461 in premarket trade.