DOMINO’S Pizza forecast softer growth in annual US and international same-store sales on Monday, as strained consumer sentiment and fierce competition weighed on demand, sending its shares sliding about 10 percent.
Consumers, already grappling with high living costs and a weak labor market, are feeling another squeeze as Middle East tensions drive up transportation costs, adding to inflation worries and prompting a pullback in discretionary spending, including on dining out.
Consumer sentiment sank to Covid-19-era lows in March as inflation weighed on spending decisions, CEO Russell Weiner said on an earnings call.
The world’s largest pizza chain operator forecast US and international comparable sales to grow in low single digits in 2026. That compares with its prior projection of a 3 percent rise in US sales and a 1 percent-2 percent increase internationally.
“Higher food prices and energy costs are already weighing on short-term earnings, but if higher fuel prices turn consumers away from spending, it would be felt in the next quarter or two — that is the reason for the more cautious outlook in the moment,” said Brian Mulberry, chief marketing strategist at Zacks Investment Management.
The company’s US comparable sales grew 0.9 percent in the first quarter, below analysts’ average estimate of a 2.72 percent rise, its first miss in a year, according to data compiled by LSEG. Sales fell about 0.5 percent a year ago.
“Domino’s is facing perhaps a tougher US market than anticipated. Inflation and a softening economy, specifically for lower-income consumers, have put pressure on its top line,” said Bruce Winder, an independent retail consultant.
To attract value-focused diners, Domino’s rolled out offers such as $9.99 “Best Deal Ever,” alongside “Mix and Match” and “Emergency Pizza.” The strategy mirrors a broader push on affordability, with McDonald’s and Burger King also ramping up low-priced deals.
Domino’s even expanded its menu by launching a Parmesan-stuffed crust pizza, among others.
“Competition within the QSR pizza space increased in Q1 as the national pizza players offered deals comparable, if not identical, to the renowned value Domino’s has made famous,” Weiner said.
The company, which announced a $1 billion share buyback, posted a 0.4 percent decline in quarterly international same-store sales, missing the estimate of a 0.7 percent rise.
Its earnings per share of $4.13 lagged the estimate of $4.27, hurt by a $30 million pre-tax charge related to certain investments.
