Value deals bring diners to Domino's but sales stay muted
DPZ•Domino's Pizza cut its full-year sales forecasts, warning that U.S. and international same-store sales would remain muted as inflation pressures weigh on consumers. Value promotions are bringing in more customers, but smaller orders are limiting sales growth.
1. Traffic rises, orders shrink
Domino's Pizza said Tuesday it had scaled back its full-year sales forecasts, warning that U.S. and international same-store sales would remain muted as growing inflation pressures tighten consumer wallets. Analysts said value-focused promotions are drawing customers and helping the company gain traffic, but customers are ordering fewer items per transaction, weighing on sales growth and franchisee profitability.
2. Analysts weigh outlook
BTIG said Domino's continued to grow traffic and take market share despite sluggish consumer spending. TD Cowen and Jefferies said the company was still struggling to grow order values, with Jefferies noting management had grown more cautious about near-term U.S. demand. The median price target among 32 brokerages covering the stock was $367.50.
