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By Juveria Tabassum
(Reuters) -Domino's Pizza on Monday posted a surprise decline in first-quarter U.S. same store sales, as high inflation and macroeconomic uncertainty hit consumer spending.
Restaurant traffic slowed down in February and March as consumer sentiment weakened mainly due to President Donald Trump's erratic trade policy, which has fanned fears of a recession in the United States.
But pizzas are generally one of the last things consumers cut back on in times of economic uncertainty as they are easy on the pocket.
Earlier this month, Domino's announced a partnership with DoorDash that will allow users to place orders via the food aggregator's app. The service, set to be launched nationwide in May, will help the company gain new customers in rural and suburban areas.
"We believe adding Doordash remains a key catalyst going forward that will enable Domino's to recover lost market share since the pandemic," said Jim Sanderson, analyst at Northcoast Research.
Domino's is well positioned to shift to positive same-store sales in the U.S. in the second half of the year, he said.
The company has been offering more rewards and deals to drive demand through the year as consumers turned more value-conscious in their dining out choices.
In the first quarter, the company launched its parmesan-stuffed crust pizza and ran a promotional "boost week", offering 50% off on all online orders in the U.S.
The world's largest pizza chain's same-store sales in the U.S. fell 0.5%, compared with analysts' average estimate of a 0.5% rise, according to data compiled by LSEG.
Domino's shares fell about 2% in premarket trading. They have risen about 16% so far this year.
For the first quarter ended March 25, the company posted earnings per share of $4.33, beating estimate of $4.07.
International same-store sales jumped 3.7%, ahead of analyst estimates of 1.93% growth.
(Reporting by Juveria Tabassum in Bengaluru; Editing by Shinjini Ganguli)