By Juveria Tabassum
(Reuters) -Domino's Pizza on Monday missed estimates for quarterly same-store sales, as fast-food peers double down on their value meal offerings, hurting demand for the company's affordable pizzas and wraps, taking its shares down 6% before the bell.
Fast-food chains have been relying more on discounting in recent years - with Domino's introducing value offerings to drive demand in late 2023, a move that was mirrored later by burger giants McDonald's and Burger King as consumers started to balk at higher menu prices.
The company would continue with its promotional efforts such as emergency pizza, as well as "boost weeks", which provided 50% off on online pizza orders in 2025, said CEO Russell Weiner on a post-earnings call.
"We believe it will be another challenging year in the industry," Weiner added.
Domino's reported a quarterly same-store sales rise of 0.4% in the U.S., compared with analysts' average estimate of a 1.63% increase, according to data compiled by LSEG.
"Going forward, we believe Domino's will continue to experience modest headwinds to traffic growth in the first half of 2025 as competition remains tough, weather, and other disruptions create volatility and consumers lean into value," said Jim Sanderson, analyst at NorthCoast Research.
Still, Domino's international business saw some recovery after macroeconomic pressures had dented demand in some markets in Europe and Asia last year.
Domino's exclusivity agreement with Uber Eats for online orders has been extended until May, and Weiner said the company had also begun negotiations with additional delivery aggregator platforms, without naming any.
Investors have been watching out for a potential deal with Doordash for orders, which could provide the pizza chain with a larger customer base, RBC analyst Reich Logan had noted last week.
The company's international same-store sales growth of 2.7% topped expectations of a 1.46% rise, while its earnings per share of $4.89 for the fourth quarter were in line with estimates.
(Reporting by Juveria Tabassum in Bengaluru; Editing by Maju Samuel)