Domino’s (DPZ) stock fell more than 3% premarket after the pizza chain posted fourth quarter results that mostly missed Wall Street’s expectations.
Before the market open Monday, Domino’s reported that revenue increased 2.9% year over year to $1.44 billion in the fourth quarter, driven higher by a 4.4% increase in revenue from higher order volumes and food and cardboard prices sold to stores. Same-store sales increased 0.4% compared to the 1.72% jump the Street predicted. Adjusted earnings came in lower too, at $4.89 per share compared to an estimate of $4.93.
Domino’s also missed expectations on full-year revenue and earnings but beat slightly on international same-store sales growth, which increased 1.6%. 2024 marked the 31st consecutive year of same-store sales growth.
In the release, Domino’s CEO Russell Weiner said its value strategy, called “Hungry for MORE,” drove “strong order count growth, even in the face of a challenging global macroeconomic environment.”
In the US in particular, he said its “pillar of Renowned Value” helped to gain market share among its quick-service restaurant pizza competitors. For the quarter, US sales ticked higher, up 0.4%, but that wasn’t as high as the 1.72% gain the Street wanted. Weiner said he remains “confident” that Domino’s will “continue to win and grow market share.”
Investors may have already anticipated these poor results.
After battling bad weather conditions in the fourth quarter, Citi analyst Jon Tower wrote in a client note prior to earnings that “shares appear to have already moved on from what is likely a soft fourth quarter and start to the first quarter.” Investors have been eyeing growth drivers, such as menu innovation and third-party delivery partners, that could turn the tide in 2025.
Shares of Domino’s are up 10% year to date versus a 2% gain for the S&P 500 (^GSPC).
Here’s what Domino’s reported in the fourth quarter, compared to Wall Street consensus estimates compiled by Bloomberg:
-
Adjusted earnings per share: $4.89, versus $4.93
-
Revenue: $1.44 billion, versus $1.48 billion
-
US same-store sales growth: +0.4%, versus +1.72%
-
Company-owned: -0.7%, versus +1.79%
-
Franchise: +0.5%, versus +1.74%
-
-
International same-store sales growth: +2.7%, versus +1.63%
Here’s Domino’s reported in its fiscal 2024 results, compared to Bloomberg consensus estimates:
-
Adjusted earnings per share: $16.69, versus $16.70
-
Revenue: $4.71 billion, versus $4.74 billion
-
US same-store sales growth: +3.2%, versus +3.63%
-
Company-owned: +3.5%, versus +4.3%
-
Franchise: +3.2%, versus +3.63%
-
-
International same-store sales growth: +1.6%, versus +1.37%
The company opened 364 stores in the fourth quarter and 775 stores for the full 2024 fiscal year.
Challenges around Domino’s international unit growth were expected to be a “key focus for longer-term investors” going into this report, Tower said prior to results.
Many analysts were focused on its largest franchisee, Domino’s Pizza Enterprises, which plans to close 205 unprofitable locations. The majority of those restaurants will be in Japan. Stifel analyst Chris O’Cull anticipates the closures will result in a roughly 100 basis point headwind to global net unit growth in 2025.
During the earnings call on Monday morning, Wall Street is eager to hear more about its partnership with third-party order platform Uber (UBER). Domino’s had set a goal to exit the year with a 3% increase in US sales from Uber.
Analysts are also eager to hear if it plans to add DoorDash (DASH) once its exclusive Uber partnership ends at the end of the first quarter.
Innovation around stuffed crust pizza, which could come in the second half of 2025, could also be a boon, Deutsche Bank research analyst Lauren Silberman said prior to the results. Other initiatives to drive same-store sales in the US this year include the company’s loyalty program, app and website upgrades, and value platforms, Silberman noted.
—
Brooke DiPalma is a senior reporter for Yahoo Finance. Follow her on Twitter at @BrookeDiPalma or email her at bdipalma@yahoofinance.com.
Click here for the latest stock market news and in-depth analysis, including events that move stocks
Read the latest financial and business news from Yahoo Finance
EMEA Tribune is not involved in this news article, it is taken from our partners and or from the News Agencies. Copyright and Credit go to the News Agencies, email news@emeatribune.com Follow our WhatsApp verified Channel
