Domino's Pizza Inc. reported its first negative U.S. same-store sales effect in 41 quarters on Thursday due in part to staffing shortages, the pizza delivery company said
Domino's DPZ reported revenue of $997.99 million, which fell short of the FactSet consensus of $1.03 billion last year, but rose from $967.7 million in 2009 to $997.99 million. The same-store sales fell 1.9% in the U.S.
Domino s executives note that U.S. same-store sales for the same period last year grew 17.5%, the biggest spike since the company went public in 2004.
Read: Jobless claims fall below 300,000 for the first time since pandemic. But more than that, Domino is dealing with some of the same staffing issues that are affecting other businesses.
The declining sales in U.S. stores this quarter was driven by lower order counts, according to Jessica Parrish, vice president, corporate controller and treasurer for Domino s, according to a FactSet transcript of the earnings call.
Our U.S. order counts during Q 3 were pressured by a very challenging staffing environment, which had certain operational impacts such as short store hours or customer service challenges in many of our stores. The company also made a distinction between the results for its franchise locations, which have a more dense and diverse footprint compared to their firm-owned locations which are heavily cultural and higher in income compared with hotel locations, which have less scope.
And Domino s said it got a boost from economic stimulus cash with the positive effect of that money beginning to taper off.
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Recall that we incurred additional bonus pay for frontline team members in the third quarter of last year, and although we made investments in front line wage rates during Q 3, we continue to experience staffing shortages in certain of our company-owned stores, Parrish said.
Domino's stock climbed after the earnings announcement, but rebounded with the day by trading to an increase of 1.7%.
We believe this factor likely affected multiple restaurant concepts Q 3 U.S. same-store sales and could be an issue in Q 4 as well, wrote Kalinowski Equity Research in a note, referring to the staffing shortage.
The Domino s stock rose 26.4% for the year to date, while the S&P 500 index SPX, increased 18% for the period.