Domino's Pizza exceeds sales forecasts as orders surge


Domino's Pizza on Monday reported first-quarter same-store sales that beat Wall Street expectations as U.S. consumers took advantage of the pizza chain's extensive loyalty program and other promotions.

Domino's Pizza has managed to counter the downturn in dining out in the U.S. by drawing inflation-weary consumers to its pizzas and chicken wings with increased revenue from its loyalty program and fresh promotional offers.

Same-store sales at Domino's Pizza in the U.S. rose 5.6% in the quarter, and CEO Russell Weiner said orders rose across all income groups in the country.

Analysts on average estimate that quarterly same-store sales will increase 4.04%, according to LSEG data.

Domino's Pizza revamped its loyalty program last September and entered into a third-party delivery partnership with Uber Eats, reviving demand for its delivery services after a period of stagnation.

It also promotes offers and promotions, such as giving customers a $3 coupon when they tip their delivery driver online for $3 or more.

Domino's Pizza said more than 3% of its sales are on track to end the year through the Uber Eats channel.

Expanding

Total revenue for the first quarter was $1.09 billion, an increase of 5.9% year over year, compared to market expectations of $1.08 billion.

The rebound in orders also gives the pizza chain room to raise menu prices. The company announced in February that it planned to raise prices by low single digits in the U.S. this year.

Gross profit margins at company-operated stores in the U.S. rose 0.6 percentage points year-on-year in the first quarter due to lower food costs.

Higher franchise fees also contributed to first-quarter earnings of $3.58 per share, compared to expectations of $3.39.



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