Domino’s Pizza stock falls 3% after U.S. same-store sales turn negative

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  • Domino’s Pizza stock fell as much as 5% in premarket trading after the pizza chain’s third-quarter revenue fell as low as 5% and its US same-store sales turned negative.
  • The company beat top analysts’ estimates for its third-quarter earnings.
  • High demand for pizza during the pandemic has caused investors to worry about pizza fatigue and tough comparisons to last year’s performance.

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Shares of Domino’s Pizza fell more than 3% in premarket trading after the pizza chain’s third-quarter revenue fell below estimates and its US same-store sales turned negative.

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The pandemic brought skyrocketing demand for Domino’s Pizza to its home market, but as consumers were vaccinated and states eased restrictions, investors began to worry about pizza fatigue. Last quarter, US same-store sales still grew 3.5%, despite facing tough comparisons.

The company’s third quarter appears to be the turning point. Same-store sales in the US decreased by 1.9%, although the metric increased by 15.6% on a two-year basis. StreetAccount estimates the company will report US same-store sales growth of 1.8%.

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The pizza chain fell short of Wall Street’s revenue estimates due to a fall in US demand. Analysts surveyed by Refinitiv were expecting net sales of $1.04 billion, but Domino’s reported $998 million in revenue for the quarter.

The company’s business is doing pretty well outside the US. International same-store sales grew 8.8% in the quarter, up 15% on a two-year basis.

Domino’s earned $3.24 per share during the quarter, which is well above the $3.11 per share expected by analysts surveyed by Refinitiv.

Although Domino’s shares were down more than 5% at one point on Thursday, the stock has climbed 19% this year, bringing its market value to $17 billion.

Read Domino’s Press Release.

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