Domino's Pizza ( NYSE: DPZ ) shares slid shapely on Thursday after missing revenue expectations for the fourth quarter and pulling in long-term forecasts.
For the fourth quarter, an EPS report of $4.43 outpaced the consensus expectation by $0.45. However, $1.39B in revenue came up short of the consensus by $50M. U.S. same store sales growth of 0.9% for the quarter was half the rate marked in the prior year quarter.
“We pride ourselves on being a work-in-progress brand and there is no better way to describe this period in our history,” CEO Russell Weiner said. “The Domino's system has a lot to be proud of while also having opportunities to address. We experienced significant pressure on our U.S. delivery business in 2022 and focused our efforts on creating solutions. We also drove continued momentum in our U.S. carryout business and achieved strong international store growth.”
He noted that over 50% of orders in the US now come through the carryout channel. The company also maintained pole position in pizza delivery in the US. Still, the noted pressure on the delivery business caused management to reel in long-term projections for sales and unit growth.
“Given the current macroeconomic headwinds that are impacting the Company's U.S. delivery business in particular, the Company is updating its two-to three-year outlook from 6% to 10% global retail sales growth to 4% to 8% global retail sales growth and global net unit growth from 6% to 8% to 5% to 7%,” the earnings release explained. “The company expects results for fiscal 2023 to come in towards the low-end of the ranges for both metrics.”
Shares of Domino’s Pizza ( DPZ ) plunged 8.51% after the results were announced.
Elsewhere, the company’s Board of Directors approved a 10% increase to the quarterly dividend. A $1.21 per share quarterly dividend is due to be paid on March 30.
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Domino’s Pizza stock dives as delivery business remains under pressure