Domino’s stock is down by about six percent, which has prompted investors to peer into the company’s sales initiatives.
In terms of the earning results for Domino’s, the company’s revenue for the past third quarter was $820 million, despite investors estimating that total would be $824 million. The company also fell short of their earnings per share; Domino’s came in at $2.04 instead of expectations of $2.07. Lastly, the company’s same-store sales growth was 1.6 percent, despite estimates of 2.9 percent.
Now investors are worried about three primary issues. Because Domino’s has undertaken near-term initiatives, their sales goals should have been met by the end of last quarter. But that strong quarter never seemed to come through for Domino’s. However, they still did their part to put their sales initiatives in place. For instance, as part of the company’s delivery insurance (where a delivery goes wrong), Domino’s will correct that free of charge. They also have a 20 percent off sale if you buy a pizza after 9 PM during the month of October in order to capture more market share later at night.
The second cause of concern is in regards to a two-to-three year outlook for same-store sales growth at 2-5 percent. However, this target mixed with the aforementioned “bad quarter” has created an increasing amount of uncertainty in the company’s potential. In spite of this, for the next three to five years, Dominos is hoping to see a 3-6 percent same-store sales growth.
Finally, the number of US store growth was 2.4 percent instead of 2.8 percent, which has caused the stock to decrease by six percent.
In short, don’t be surprised if you see new sales initiative coming from Domino’s before the year ends!