Domino’s Pizza on Tuesday reported fourth-quarter same-store sales that missed estimates,
fueling worries that the delivery chain’s sales could be weakening and sending shares lower in morning trading.
Investors also assessed a report by Brazil Journal, citing people with knowledge of the matter, that said Restaurant Brands International is putting together a bid to buy Domino’s. Restaurant Brands is the parent of Burger King and other quick-service chains. Reuters was not immediately able to verify the report.
Domino’s shares were down 2.5 percent at $215.33.
Same-store sales at company-owned outlets in the United States rose 3.8 percent, while those at its franchise stores were up 4.2 percent.
Analysts had expected same-store sales to surge 5.93 percent at company-owned U.S. stores and 6 percent at its franchise stores, according to Thomson Reuters I/B/E/S.
On a conference call with analysts, outgoing Chief Executive J. Patrick Doyle said international same-store sales were more volatile than usual, but that Domino’s business remains healthy.
Results from the United States were lapping a very strong result from the same quarter a year earlier, Doyle said.
Doyle steps down as CEO as the end of June, ending an eight-year run marked by explosive share gains from improving the taste of Domino’s pizza and investing in online ordering and other initiatives that cemented the company’s digital leadership in the restaurant industry.
Same-store sales in its international business rose 2.5 percent, but missed analysts’ expectations of 5.4 percent. Among other things, analysts called out weakness in Japan.
Revenue rose 8.8 percent to $891.5 million, missing analysts’ estimates of $906.4 million.
Net income rose to $93.3 million, or $2.09 per share, in the fourth quarter ended Dec. 31 from $72.7 million, or $1.48 per share, a year earlier.
The company recorded global net store growth of 422 stores in the quarter, including 96 domestic stores and 326 international stores.
Richard Allison, president of Domino’s international business, will succeed Doyle as CEO.
Restaurant Brands was formed in 2014, when 3G Capital-backed Burger King acquired Canadian coffee and doughnut chain Tim Hortons for $11 billion. It bought Popeyes Louisiana Kitchen in March 2017 in a deal valued at $1.8 billion.