Domino's Tumbles as Fast-Food Competition Slows Its Sales Growthby
Domino’s Pizza Inc. fell the most in almost four years after heightened competition from fast-food rivals slowed its sales growth.
While first-quarter revenue rose 7.4 percent to $539.2 million, that trailed analysts’ $543.9 million average estimate. Profit increased to 89 cents a share, the Ann Arbor, Michigan-based company said Thursday in a statement. Analysts projected 98 cents, on average.
With tepid wage gains restraining Americans’ spending, fast-food chains have been offering steep discounts, such as two sandwiches for $5 at McDonald’s Corp. Domino’s comparable-store sales slowed to a 6.4 percent gain in the first quarter, compared with a 10.7 percent jump in the prior quarter. The company, which has more locations abroad than in the U.S., also said revenue was hurt by foreign currency exchange rates.
The shares slid as much as 10 percent to $120.16 in New York, the biggest intraday decline since May 2012. Domino’s had gained 20 percent this year through Wednesday.