Domino’s US has released its third quarter results of 2018 which show a ‘slower-than-expected’ sales growth.
Same-store sales growth at domestic company-owned stores rose by 4.9% compared with an 8.4% growth last year, while revenues increased by 22.1% to $786m, both lower than Wall Street predications according to Reuters.
Domestic franchise store growth saw a 6.4% increase compared to last year’s 8.4% in the third quarter.
Net income saw a stronger increase of 49.2% to $84.1m in this quarter, which the chain attributes to higher global royalty revenues and supply chain volumes. The chain also sold 12 domestic company-owned stores to a franchisee in the third quarter.
Domino’s US CEO Ritch Allison said in a statement on Tuesday (16 October): “I continue to be proud of our great franchisees and operators around the world. In particular, our US business once again executed at extremely high levels in the third quarter. Our global business, driven by strong retail sales growth and franchisee economics that outperformed the industry, continued its strong momentum.”
Domino’s also saw global net store growth of 232, which consisted of 173 net new international stores and 59 net new domestic stores.
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Competition in the fast casual pizza industry has intensified recently, according to foodservice consulting company Technomic. However, smaller rival Papa John’s has struggled this year due to an investigation into the former chairman’s racist remarks in August.
Papa John’s founder John H. Schnatter admitted to making racist statements in a media training session in May, which resulted in reports of a 17% decrease in stock.
According to Reuters, analysts expect Pizza Hut to benefit from Papa John’s troubles rather than Domino’s.