Javanshir Hajizada gets ready for a bicycle delivery for Domino’s Pizza, which is hiring drivers, on March 25, 2020 in Boston.
David L. Ryan | Boston Globe | Getty Images
Shares of Domino’s Pizza fell 7% in premarket trading Tuesday after the pizza chain’s estimates for its first-quarter same-store sales disappointed investors.
The stock, which has a market value of $12.7 billion, is up 9% so far in 2020. Analysts predicted that the pizza chain’s delivery-based business would fare better than other restaurants’ as the country grapples with the coronavirus pandemic.
U.S. same-store sales rose 1% from Feb. 24 to March 22. Domino’s said on Monday that a number of factors impacted its U.S. business, including school closures, cancellations of live sports and U.S. consumers stocking up at the grocery store.
In the same period, international same-store sales fell 0.2%.
Based on these trends, the company estimates U.S. same-store sales growth of 1.6% and international same-store sales growth of 1.5% during the first quarter. Meanwhile, global retail sales are expected to have risen by 4.4% during the same period.
CEO Ritch Allison said in a statement that “all but a handful” of Domino’s U.S. locations are open. Fourteen of its international markets have closed, and 23 international markets have partially closed locations. About 1,400 international restaurants have temporarily closed.
Domino’s also withdrew its 2020 outlook related to general and administrative expenses, capital expenditures, food costs and foreign currency.
Citing the market uncertainty, Domino’s has borrowed the rest of the $158 under outstanding variable funding notes to improve its cash position. The pizza chain has more than $300 million of cash on hand.
Source: Thanks https://www.cnbc.com/2020/03/31/dominos-stock-falls-after-pizza-chains-same-store-sales-disappoint.html