By Anuja Bharat Mistry
April 27 (Reuters) – Domino’s Pizza missed same-store sales estimates for the first quarter on Monday, as higher living costs tied to ongoing geopolitical and economic uncertainties prompted budget-strained customers to cut discretionary spending, including dining out.
Shares of the pizza giant, which posted its first quarterly U.S. sales miss in a year, fell 5% in premarket trading.
Already squeezed by high inflation and a weak labor market, consumers now face fresh pressures as Middle East tensions drive up transportation costs that threaten to further increase food prices, accelerating a shift toward lower-cost, at-home meals and dampening sales across restaurant and fast-food chains.
Domino’s, which also announced a $1 billion share buyback program, posted quarterly U.S. same-store sales growth of 0.9%, missing analysts’ average estimate of a 2.72% rise, according to data compiled by LSEG. Sales were down about 0.5% a year ago.
The company posted a 0.4% decline in quarterly international same-store sales, also missing the estimate of a 0.7% rise.
“The firm delivered positive transaction growth, but the weak figure likely reflects the discount intensity needed to lure consumers,” Ari Felhandler, analyst with Morningstar, said.
To attract value-focused customers, Domino’s has revived its $9.99 “Best Deal Ever”, alongside offers such as “Mix and Match” and “Emergency Pizza”, as well as rolled out items such as a Parmesan-stuffed crust pizza.
In February, the company had said it expects U.S. same-store sales to grow by 3% in fiscal 2026, similar to last year, with growth higher in the first half than in the second.
Domino’s per-share earnings fell to $4.13 for the quarter ended March 22, from $4.33 a year ago, weighed down by a $30 million pre-tax charge related to investment in DPC Dash, a holding company that is primarily engaged in operations of fast-food restaurant chains. Analysts estimated a profit of $4.27 per share.
(Reporting by Anuja Bharat Mistry in Bengaluru; Editing by Shilpi Majumdar)
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