Domino's U.S. same-store sales fall for first time in a decade as demand slows
By Kathi on Oct 14, 2021 | 04:34 AM IST
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.