Domino's Pizza Inc missed quarterly sales estimates on Thursday as inflation-hit customers, put off by higher delivery fees, cut back on online orders of pizzas and chicken wings, sending the company's shares down 11%.
A Domino's Pizza restaurant is seen in Los Angeles, California, U.S. July 18, 2018. REUTERS/Lucy NicholsonHigher prices help adjusted EPS of $3.97 top estimates of $3.94missed quarterly sales estimates on Thursday as inflation-hit customers, put off by higher delivery fees, cut back on online orders of pizzas and chicken wings, sending the company's shares down 11%.
The world's largest pizza chain, like many U.S. restaurants, has jacked up delivery charges and menu prices over the past year to counter higher labor and commodity costs, which prompted more consumers to cook at home instead of getting their meals delivered. This squeezed Domino's, which brings in 60% of its sales through its delivery business, even as it tried to lure customers with limited-time discounts on its pizzas. The number of orders fell in the fourth quarter, with delivery same-store sales declining 6.6%.
"We expect the economy to be a headwind for our delivery business in 2023 ... Every day, delivery customers will be deciding where to spend their hard-earned dollars," Chief Executive Russell Weiner said on a post-earnings call.
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