Business

Domino’s Pizza disappoints investors despite solid quarterly figures

Domino's Pizza releases figures for Q2 2024 – disappointed investors react negatively to results.

Eulerpool News Jul 19, 2024, 2:31 PM

Sure, here's the translated heading:

"The fast food chain Domino’s Pizza has released its figures for the second quarter of 2024 today. Despite solid sales and profit increases, investors are disappointed.

In the second quarter, Domino’s Pizza achieved a revenue of approximately $1.10 billion, which largely met expectations according to Reuters. Compared to the same period last year, this represents an increase of about 7 percent. The company maintains its long-term forecast of annual global retail sales growth of more than 7 percent.

Domino's was able to exceed expectations in terms of profit: Earnings per share were $4.03, while analysts had expected $3.68 according to Reuters. In the same quarter of the previous year, earnings per share were $3.08, which represents an increase of approximately 31 percent. Contributing to this result were lower supply chain costs and the resilience of same-store sales in the U.S., even though these fell short of expectations.

Domino’s reported an increase of 4.8 percent in same-store sales in the US, while analysts had expected 4.9 percent according to Reuters. The international same-store sales growth (excluding the effects of foreign currency) was 2.1 percent, also below the expectations of 2.5 percent.

The announcement that Domino's will open fewer stores in its key international markets than expected caused disappointment among investors. According to Reuters, the company is struggling with subdued demand from cost-conscious consumers. Domino's plans to fall short of its target of 925+ net stores internationally in 2024 by 175 to 275 stores, primarily due to challenges in openings and closures by one of its master franchisees, Domino's Pizza Enterprises (DPA).

Furthermore, Domino's has temporarily suspended its forecast of more than 1,100 net stores worldwide until the full impact of DPE's store openings and closures on international net store growth is known. Jim Sanderson, an analyst at Northcoast Research, expressed concerns to Reuters, stating that international unit growth is a key component of the company's long-term growth strategy.

As a result of this news, Domino’s Pizza stock fell by 13.42 percent to a closing price of $409.78 on Thursday at the NYSE. After recording a gain of around 15 percent since the beginning of the year until Wednesday, today's price drop nearly wiped out all the gains Domino’s Pizza stock had made since the start of the year.

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