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...

 

more, including links

https://www.cnbc.com/2019/10/08/dominos-pizza-ceo-says-uncertainty-around-the-fate-of-third-party-delivery-led-to-slashed-outlook.html