Domino’s Pizza Stock Initially Dropped as Partnership with Uber Didn’t Justify Expectations
July 24, 2023
Domino's Pizza (DPZ) missed Wall Street's Q2 sales expectations as higher delivery fees and price hikes aimed at boosting profits hurt demand for its pizza and other traditional meals like spicy wings.
Domino's seen shares of the world's largest pizza chain to fall initially by 4% before recovering to +1.7% on an external factor – good macro stats. The main negative factor was unexpectedly lower orders for the quarter. Domino’s U.S. same-store sales rose 0.1% in Q2, compared with analysts’ expectations of about 0.2%. U.S. company-owned store sales fell as 114 company-owned stores were relicensed in Arizona and Utah. Same-store sales at U.S. company-operated stores rose 5.5%, but same-store sales at franchised stores fell 0.1%.
In an effort to boost its sluggish delivery business, the pizza maker partnered with Uber in early July, allowing customers to place orders through the ride-sharing company's food delivery apps, Uber Eats and Postmates.
All in all, DPZ’s net income increased by $6.9 million due to higher operating income. EPS was $3.08, compared to $2.82 in Q2 2022 and the consensus estimate of $3.07.
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