Domino's beats US sales estimates as deals attract budget-conscious customers
By Anuja Bharat Mistry and Krisha Bhatt
Feb 23 (Reuters) - Domino's Pizza DPZ.O beat Wall Street estimates for fourth-quarter U.S. same-store sales on Monday, as value-driven promotions and new menu items fueled demand, sending the pizza chain's shares up about 5% in premarket trading.
Consumers, especially from lower-income households, are increasingly opting for home-cooked meals over eating out as they tighten budgets amid rising prices on daily essentials, such as groceries and other food items.
Domino's is offering more promotions to attract customers, including the relaunch of its "Best Deal Ever" at $9.99, as well as introducing fresh flavors and new menu items, such as Parmesan-stuffed crust pizza.
In the fourth quarter, U.S. same-store sales at Domino's rose 3.7%, topping analysts' estimates of 3.47%, according to data compiled by LSEG.
"Domino's continues to steal share in the U.S. pizza category," said Ari Felhandler, analyst at Morningstar.
The company is well-positioned to win consumers with its value menu, digital growth, and faster delivery, he added.
Domino's also gained from its partnership with online food-delivery firms such as DoorDash DASH.O, which helped the pizza chain expand its reach.
CEO Russell Weiner said Domino's expects to meaningfully increase its market share within the U.S. quick-service restaurant pizza category this year.
Meanwhile, international same-store sales rose by 0.7%, missing estimates of a 1.03% increase due to tepid demand and stiff competition in regions such as Australia and Japan.
Fast-food rivals such as burger giant McDonald's MCD.N and Taco Bell-parent Yum Brands YUM.N have also launched value meals, intensifying competition to attract budget-conscious customers amid weak global demand.
Higher-end chains such as Chipotle Mexican Grill, on the other hand, saw sales decline.
Domino's quarterly diluted earnings per share of $5.35 rose from $4.89 a year ago but missed estimates of $5.37.
Domino's posts third straight quarter of U.S. sales rise 
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