Domino s reports first quarterly sales decline in over a decade

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Domino s reports first quarterly sales decline in over a decade

Domino s Pizza put an ongoing nationwide labor shortage as a key obstacle after the company posted its first quarterly sales decline in more than a decade on Thursday.

Company executives say the labor shortage resulted in longer operating hours and reduced delivery times at some of its distribution centers. The worker shortage affected Domino s operations at a time of increased competition as other restaurants return to normal operations during the COVID - 19 pandemic.

Our US order counts during Q3 were determined by a very challenging staffing environment that had certain operational impacts such as shortened store hours or customer service challenges in many of our stores, Domino s Treasurer Jessica Parrish said during an earnings call.

Same-store sales declined 1.9% during the third quarter, ending a long streak of sales growth in U.S. locations. The decline was partly due to a difficult year-over-year sales comparison. Domino s had 17.5% sales growth during the same quarter one year earlier when homebound Americans relied more heavily on food delivery in the midst of the pandemic.

Domino s CEO Mark Lick Allison noted that same-store sales were rose 15.6% on a two-year basis. Domino s announced net income of $120.4 million or $3.24 per share, topping the expectations of Wall Street.

Allison detailed several steps to solve the worker shortage. The company has improved its application process for job candidates, shared operational best practices with store locations to improve speed on time-consuming tasks and is exploring ways to streamline deliveries.

While I am optimistic about the efforts that we and our franchisees have underway, we believe staffing could remain a significant challenge in the near term as the labor market continues to evolve, Allison said.

The CEO said the company expects inflationary headwinds to continue impacting Domino's and the broader restaurant industry over the coming quarters. The president also noted a boost to sales in recent quarters following rounds of federal stimulus checks had ended.