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Domino’s Pizza beats sales expectations as orders thrive
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(Reuters) -Domino’s Pizza topped Wall Street expectations for first-quarter same-store sales on Monday, as consumers in the United States tapped into the pizza chain’s spruced-up loyalty program and other promotional offerings.
(Reuters) -Domino’s Pizza topped Wall Street expectations for first-quarter same-store sales on Monday, as consumers in the United States tapped into the pizza chain’s spruced-up loyalty program and other promotional offerings.
Shares of the company rose 4.5% in premarket trading, after it also edged past expectations for total revenue in the quarter.
Domino’s has managed to buck a downbeat trend for eating out in the United States, with better returns on its loyalty program and fresh promotional offers drawing inflation-weary consumers to its pizzas and chicken wings.
Domino’s U.S. same-store sales rose 5.6% in the quarter, with CEO Russell Weiner saying that the company saw order growth across all income cohorts in the country.
Analysts on average estimated quarterly same-store sales to rise 4.04%, according to LSEG data.
Domino’s revamped its loyalty program in September last year and entered into a third-party delivery partnership with Uber Eats, which helped the company rekindle delivery demand after a period of weakness.
It is also pushing forward with its offers and promotions such as giving customers a $3 coupon on online tips of $3 or more to their delivery drivers.
Domino’s said it remained on track to end the year with 3% or more of its sales coming through the Uber Eats channel.
Total revenue for the first quarter rose 5.9% over the year earlier to $1.09 billion, compared with market expectations of $1.08 billion.
A rebound in orders has also given the pizza chain room to increase menu prices. The company had said in February it plans to raise prices in the low-single-digit percentage range in the U.S. this year.
Lower food costs drove its U.S. company-owned store gross margin up by 0.6 percentage point in the first quarter compared with the year earlier.
Higher franchisee fee also contributed to its first-quarter earnings of $3.58 per share, compared with estimates of $3.39.
(Reporting by Juveria Tabassum; Editing by Shilpi Majumdar)
A loyalty program is a marketing strategy designed to encourage customers to continue to shop at or use the services of a business by offering rewards for their repeat business.
Same-store sales refer to the revenue generated by a retail store over a specific period compared to the same period in the previous year, excluding sales from new stores.
Total revenue is the total amount of money generated by a company from its business activities, including sales of goods and services, before any expenses are deducted.
Promotional offerings are marketing strategies that provide incentives, such as discounts or special deals, to encourage customers to make purchases.
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