Domino's Pizza ( NYSE: DPZ ) fell in early trading on Thursday after missing profit expectations with its Q2 earnings report amid the inflationary backdrop.
U.S. same store sales declined 2.9% to beat the consensus expectation for a drop of 5.0%. International same store sales (excluding foreign currency impact) fell 2.2%, driven in part by a value added tax holiday in the United Kingdom in Q2 of 2021 that did not recur in Q2 of 2022.
CEO Russell Weiner said DPZ continued to navigate a difficult labor market, especially for delivery drivers. He also cited inflationary pressures combined with COVID and stimulus-fueled sales comparables from the prior two years in the U.S.
Net income decreased 12.1% in Q2 due largely to lower income from operations and a higher provision for income taxes, partially offset by lower net interest expense.
The pizza operator saw a net addition of 233 stores during the quarter.
Shares of DPZ shed 2.62% premarket to $400.10.
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Domino's Pizza slumps after inflation pressures hit bottom line