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Same-store sales at company-owned U.S. outlets
grew 2.1 percent - slowest in at least three years - widely
missing the average estimate of 4.02 percent, according to IBES
Refinitiv data.
The popular pizza chain has been facing intense competition from
delivery services such as GrubHub Inc and UberEats, which offer
a wide range of cuisines from a variety of restaurants.
To claw back some market share, Domino's has been aggressively
growing its store count by opening more small-format outlets,
with fewer seating, to deliver faster by bringing delivery areas
tighter and closer together.
The company has about 16,000 outlets worldwide and aims to grow
to 25,000 stores by end of 2025.
The multiple store strategy, termed fortressing, has helped
Domino's improve the quality and speed of its delivery, but
skewed sales toward newer outlets, hitting same-store sale
comparisons and also overcrowding the market.
Domino's said U.S. comparable sales fell between 1 and 1.5
points in 2018, but it was willing to make the investment for
long-term growth.
International same-store sales for the company were also weak,
rising only 1.8 percent, well below the estimate of 2.43
percent.
"We remain focused on improving international comps," Chief
Executive Officer Ritch Allison said in a statement.
Net income rose to $92.7 million, or $2.20 per share, in the
first quarter ended March 24, from $88.8 million, or $2 per
share, a year earlier.
Total revenue rose 6.4 percent to $836 million, but missed Wall
Street's forecast of $849.6 million.
(Reporting by Nivedita Balu and Aishwarya Venugopal in Bengaluru;
Editing by Shinjini Ganguli)
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