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Key Takeaways
- Domino’s Pizza’s latest quarterly revenue and updated international expansion plans sent shares tumbling Thursday.
- Sales missed expectations, and the company is reducing outlook for net new stores in international markets.
- The pizza delivery giant also reported much of its net income growth was due to accounting effects.
Domino’s Pizza ( DPZ ) shares sank in intraday trading Thursday after the pizza-delivery giant reported revenue that missed expectations and pulled back expansion plans overseas.
The company posted second-quarter revenue a tick under $1.1 billion, up 7.1% year-over-year but just below the consensus estimate of analysts compiled by Visible Alpha.
Domino’s net income rose almost 30% to $142 million, or $4.03 per share, beating estimates. Much of the profit growth was due to an accounting effect, the company said.
U.S. same-store sales advanced 4.8%, while they were up 2.1% in international markets. Chief Executive Officer (CEO ) Russell Weiner said the increase was accomplished by “profitable order count growth.”
Domino’s Warns of Missing Goal for Net New Stores Worldwide
The company warned that it now anticipates that it will miss its full-year goal of at least 925 net new stores internationally by 175 to 275 stores, citing “challenges” in openings and closings at one of its key franchisees, Domino’s Pizza Enterprises.
Domino’s said it was “temporarily suspending” its guidance for at least 1,100 net new global stores. It left untouched its revenue and operating profit guidance for the year.
The stock was down 12% to $415.41 as of shortly after 11 a.m. ET Thursday, leaving the shares roughly flat year to date.