October 14 (Reuters) – Domino’s Pizza Inc. (DPZ.N) announced on Thursday its first drop in sales of the same stores in over a decade as the world’s largest pizza chain struggled with a slowdown in supply demand and a tight labor market that created a shortage of drivers.
As COVID-19 subsides, Americans have begun eating out at restaurants after more than a year of ordering food at home, slowing sales at Domino’s, which gets most of its business from deliveries and take-away orders.
In addition to its problems, Domino’s also said that a serious workforce in the United States struck a blow to its business, forcing it to reduce store opening hours and compromise on delivery times.
To address the shortage of manpower, Domino’s CEO Richard Allison said the company wanted to maximize the number of deliveries a driver could make per day. Shift.
“I do not see why drivers should ever have to get out of their cars. Why can we not get them to return to the store to the customer and maximize deliveries per driver per hour,” Allison said in a call with analysts.
The Michigan-based company said benefits from stimulus checks also helped lead to a 1.9% drop in sales of the same store at its U.S. restaurants in the third quarter.
That was beyond analysts’ estimates of a 1.89% increase, according to IBES data from Refinitiv, and a reported jump of 17.5% a year ago.
Compared to 2019, however, the pizza chain’s US store sales still increased by 15.6%.
The shares of the company rose 2% in afternoon trading as it also reported an increase of 8.8% in its international sales in the same store.
Domino’s net income increased 21.5% to $ 120.4 million or $ 3.24 per share. Stock, beating estimates at $ 3.11 per share.
Reporting by Deborah Sophia in Bengaluru; editing of Uttaresh.V
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