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Domino’s expects gross sales strain to persist after first quarter decline

Domino’s expects gross sales strain to persist after first quarter decline

A Domino’s Pizza restaurant is seen in Los Angeles, California, U.S. July 18, 2018. REUTERS/Lucy Nicholson/File Photograph

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April 28 (Reuters) – Domino’s Pizza Inc (DPZ.N) missed quarterly gross sales estimates on Thursday and warned that employees shortages and inflation would put strain on its enterprise later within the yr, sending costs plummeting. quick meals chain shares 5%.

U.S. eating places struggled to maintain staff from leaving for better-paying jobs, with Domino’s even providing customers a $3 coupon code to choose up their very own on-line orders in the course of the quarter to bypass a scarcity of drivers.

“2022 is shaping as much as be a troublesome yr,” chief govt Richard Allison mentioned on an earnings convention name, including that the corporate’s U.S. operations will come beneath strain on earnings and gross sales within the coming quarters. .

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Domino’s downbeat replace comes at a time when analysts mentioned staffing points at U.S. eating places have been easing, setting the business up for a stronger second half.

“We count on any enchancment within the restaurant macro surroundings to be a possible headwind for Domino’s given a return to in-restaurant eating,” mentioned Matt Matthew Goodman, senior fairness analyst at M Science. .

Wall Road analysts mentioned traders worry People will miss pizza after a two-year pandemic that has seen them order extra pies and assist increase gross sales of Domino’s and rival Papa John’s (PZZA .O).

Pizza gross sales rose 9.5% to greater than $45 billion final yr, with Domino’s accounting for a few fifth of that, Credit score Suisse mentioned.

Domino’s mentioned U.S. same-store gross sales within the first quarter ended March 27, nevertheless, fell 3.6%, whereas analysts polled by Refinitiv on common anticipated a decline of 0.6%.

In contrast, McDonald’s (MCD.N) reported better-than-expected quarterly outcomes, helped by worth hikes and its new loyalty program. Learn extra

For Domino’s, earnings per share got here in at $2.50, under estimates of $3.06.

To fight rising commodity prices, Domino’s additionally raised the worth of its “combine and match” supply deal from $1 to $6.99.

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Reporting by Praveen Paramasivam in Bengaluru; Enhancing by Maju Samuel

Our requirements: The Thomson Reuters Belief Rules.

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