Domino’s beats U.S. sales estimates as deals attract budget-conscious customers

Domino’s Pizza beat Wall Street estimates for fourth-quarter U.S. same-store sales on Monday, as value-driven promotions and new menu items fueled demand, sending the pizza chain’s shares up about five per cent in premarket trading.

Consumers, especially from lower-income households, are increasingly opting for home-cooked meals over eating out as they tighten budgets amid rising prices on daily essentials, such as groceries and other food items.

Domino’s is offering more promotions to attract customers, including the relaunch of its “Best Deal Ever” at US$9.99, as well as introducing fresh flavors and new menu items, such as Parmesan-stuffed crust pizza.

In the fourth quarter, U.S. same-store sales at Domino’s rose 3.7 per cent, topping analysts’ estimates of 3.47 per cent, according to data compiled by LSEG.

“Domino’s continues to steal share in the U.S. pizza category,” said Ari Felhandler, analyst at Morningstar.

The company is well-positioned to win consumers with its value menu, digital growth, and faster delivery, he added.

Domino’s also gained from its partnership with online food-delivery firms such as DoorDash, which helped the pizza chain expand its reach.

CEO Russell Weiner said Domino’s expects to meaningfully increase its market share within the U.S. quick-service restaurant pizza category this year.

Meanwhile, international same-store sales rose by 0.7 per cent, missing estimates of a 1.03 per cent increase due to tepid demand and stiff competition in regions such as Australia and Japan.

Fast-food rivals such as burger giant McDonald’s and Taco Bell-parent Yum Brands have also launched value meals, intensifying competitionto attract budget-conscious customers amid weak global demand.

Higher-end chains such as Chipotle Mexican Grill, on the other hand, saw sales decline.

Domino’s quarterly diluted earnings per share of $5.35 rose from $4.89 a year ago but missed estimates of $5.37.

(Reporting by Anuja Bharat Mistry and Krisha Bhatt in Bengaluru; Editing by Leroy Leo)