Domino's Pizza misses revenue estimates as higher prices squeeze demand
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DOMINO’S Pizza missed Wall Street estimates for second-quarter revenue on Monday (Jul 24), 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 per cent in pre-market trading, as Domino’s said it saw lower order volumes during the quarter.
Higher labour 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.
Domino’s US same-store sales rose 0.1 per cent in the second quarter, compared with analysts’ estimates of an about 0.2 per cent 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 autumn.
“Over two-thirds of our stores around the world will have the ability to take orders from Uber Eats,” Domino’s chief executive officer Russell Weiner said in a statement on Monday.
Domino’s total revenue fell 3.8 per cent to US$1.02 billion in the three months ended Jun 18, compared with analysts’ estimate of $1.07 billion, according to Refinitiv IBES data.
But the fast-food chain reported a profit of US$3.08 per share, above Refinitiv’s estimate of US$3.05. REUTERS
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