Domino’s Pizza (DPZ) on Tuesday reported a miss on both the top and bottom lines during its third quarter, as the company struggles to fend off a stiff challenge from the growing number of food delivery services.
Domino’s has been not been immune to the pressures of third-party aggregators like DoorDash, Uber Eats (UBER) and Grubhub (GRUB) — all of which have disrupted the food space. The pizza giant’s same-store sales, a key industry metric, also missed expectations.
Shares reversed earlier losses and rose 2% Tuesday.
Here were the numbers for Domino’s third quarter, compared to Bloomberg-compiled estimates:
Revenue: $820.8 million vs. $823.10 million expected
Adjusted earnings per share: $2.05 vs. $2.07 expected
Domestic same-store sales: +2.4% vs. +2.6% expected
International same-store sales: +1.7% vs. +2.8% expected
Domino’s third-quarter U.S. same-store sales missed Wall Street estimates for the fourth consecutive quarter. The pizza giant now expects U.S. same-stores sales growth between 7% to 10% over the next two to three years. It previously anticipated same-store sales growth between 8% and 12% over a three to five year period.
Meanwhile, internationally, Domino’s sees same-store sales growth between 1%-4% over a two to three year period. Previously, the company expected 3% to 6% same-store sales growth over the next three to five years.
“It was a good quarter for Domino's, as we continue to lean on our fundamental strength against a unique competitive environment,” Domino’s CEO Ritch Allison said in a statement.
Competition in the fast-food industry has been running hot, as companies focus on new menu innovation, upgraded technology and delivery to drive higher sales and increase foot traffic.
For many years, Domino’s was able to dominate the industry with strong same-store sales growth thanks to its early adoption of technology. However, in recent quarters, the pizza giant has struggled to gain its footing as competition and third-party delivery apps threaten to stunt its growth.
Following Domino’s second-quarter earnings report, Allison cited “headwinds related to aggressive activity from third-party delivery aggregators. I do not expect this activity to ease in the near-term.”
Shares of Domino’s have dipped 1.6% this year, as the S&P 500 (^GSPC) rose 19% in the same time period.
Domino’s earnings conference call with management kicks off at 10 a.m. ET.
This post is developing. Please check back for updates.
Heidi Chung is a reporter at Yahoo Finance. Follow her on Twitter: @heidi_chung.
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