Domino's Pizza (DPZ) shares tumbled 5.07% in pre-market trading on Monday following the release of its first-quarter earnings report, which revealed an unexpected decline in U.S. same-store sales. The world's largest pizza chain faced challenges as consumers tightened their spending on dining out amid high inflation and economic uncertainty.
The company reported a 0.5% drop in U.S. same-store sales, contrary to analysts' expectations of a 0.49% increase. This surprising decline highlights the impact of the current economic climate on consumer behavior, particularly in discretionary spending categories like dining out. Despite the domestic sales setback, Domino's international same-store sales grew by 3.7%, outpacing analyst estimates of 1.93% growth.
On a positive note, Domino's earnings per share for the quarter came in at $4.33, surpassing the Wall Street consensus of $4.07. The company's efforts to drive demand through initiatives such as the newly launched parmesan-stuffed crust pizza and promotional "boost weeks" offering 50% off on all online orders seemed to have partially mitigated the impact of reduced consumer spending. Additionally, Domino's recent partnership announcement with DoorDash, set to launch nationwide in May, could potentially boost sales in the coming quarters by expanding its delivery reach.
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