Domino’s Pizza CEO says uncertainty around the fate of third-party delivery led to slashed outlook
· Domino’s announces a new outlook, covering the next two to three years, that replaces its prior outlook for the next three to five years.
· The pizza chain lowers its expected sales growth to a range of 7% to 10% from a previous range of 8% to 12%.
· Domino’s is focused on building more U.S. stores in order to decrease delivery times and grab more market share from its rivals.
Amelia Lucas, CNBC
Oct 8 2019
After Domino’s Pizza slashed its outlook for sales growth for the next two to three years, company executives said Tuesday that market uncertainty and competition from third-party delivery aggregators led to the changes.
“Evolving market conditions and market uncertainty have reduced the relevance of a three-to-five-year outlook,” CEO Ritch Allison told investors on the conference call.
Shares of the company, which opened down more than 5%, turned positive on Allison’s comments. The stock is now trading up 2%.
The new outlook, which covers the next two to three years, replaces its prior outlook for the next three to five years.
“It’s not a reactive decision, it’s a proactive decision to change the structure of the guidance,” Allison said.
Domino’s lowered its expected sales growth to a range of 7% to 10% from a previous range of 8% to 12%.
It also lowered its long-term forecast for both domestic and international same-store sales growth. The pizza chain now expects U.S. same-store sales growth in a range of 2% to 5%, down from a prior range of 3% to 6%. The outlook for international same-store sales growth was slashed from a range of 3% to 6% to a range of 1% to 4%.
The pizza chain still expects net store growth over the next two to three years of between 6% to 8%.
Domino’s U.S. business has faced pressure from...
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