Domino's Shares Rebound Despite Sales-Growth Warning
October 08 2019 - 5:02PM
Dow Jones News
By Jessica Menton
Domino's Pizza delivered a blow to pizza stocks Tuesday, then
didn't stick around for a slice of the aftermath.
Shares of the world's largest pizza company slid as much as 6.1%
in early trading after a weaker-than-expected earnings report. Papa
John's International slumped 4% while Pizza Hut parent Yum Brands
fell 1%.
Buffeted by increased competition from food-delivery services
such as Grubhub, DoorDash and Uber Eats, the pizza chain said it
expects U.S. same-store sales to grow between 2% and 5% over the
next two to three years. That is down from prior projections for an
increase of 3% to 6% over three to five years.
But Domino's stock turned 4.7% higher after Chief Executive
Ritch Allison tried to ease investors' concerns about the long-term
outlook and the company announced it would repurchase $1 billion in
shares.
"The reality is that we don't have visibility into exactly how
long some of these new entrants into the quick-service delivery
segment are going to benefit from the financial support of
aggregators who are seeking to buy market share," Mr. Allison said
during the earnings call with shareholders Tuesday.
Domino's shares have largely underperformed the broader market
this year. The stock has risen 2.2% in 2019, compared with the
S&P 500's 15% climb.
Write to Jessica Menton at Jessica.Menton@wsj.com
(END) Dow Jones Newswires
October 08, 2019 16:47 ET (20:47 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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