Domino's forecasts muted annual same-store sales as competition, cautious consumers weigh on demand
Oct 13 (Reuters) - Domino's Pizza DPZ.O on Tuesday scaled back its full-year sales outlook, warning that US and international comparable sales growth would remain muted, sending shares down about 3% in early trading.
The pizza giant has reported slowing comparable sales for several quarters running, squeezed by rising competition, persistent inflation and a softening US labor market that have made consumers increasingly cautious about discretionary spending.
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"We expect the macro environment to remain an overhang on the consumer through the balance of the year," CEO Joe Jordan, who joined earlier this month, said on a post earnings call
Demand remains challenging across the quick-service restaurant and pizza industry, Jordan added.
Jordan said the company aims to restore profit and order-count growth while expanding its competitive reach beyond the traditional quick-service pizza market.
Domino's now expects US same-store sales to be towards the low end of low-single-digit growth forecast.
The key test for the new CEO is driving order growth through promotions and new products without hurting franchisee profitability, said Lale Akoner, an analyst at eToro.
Its annual international comparable sales are expected to be about flat, compared with prior forecast of low-single-digit growth.
Domino's posted quarterly US same-store sales growth of 0.3%, below analysts' estimates of a 0.71% rise, according to data compiled by LSEG.
Its quarterly international same-store sales grew 0.2%, versus estimates of 0.88% rise.
However, Domino's posted quarterly revenue of $1.19 billion and profit of $4.60 per share, both topping estimates of $1.18 billion and $4.37 per share, respectively.
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