Domino’s Pizza missed Wall Street estimates for second-quarter revenue on Monday, as elevated delivery fees and higher prices to boost margins hurt demand for its pizzas and chicken wings.
Shares of the world’s largest pizza chain dropped 4% in premarket trading as Domino’s said it saw lower order volumes during the quarter.
Higher labor and raw material costs have forced restaurant chains, even the biggest names including McDonald’s, to jack up menu prices and delivery fees, which hurt cost-conscious consumers whose budgets are already squeezed by sticky inflation.
Domino’s U.S. same-store sales rose 0.1% in the second quarter, compared with analysts’ estimates of an about 0.2% increase.
In a bid to boost its sluggish delivery business, the pizza maker partnered with Uber earlier in July, which will allow its customers to place order on the ride-sharing company’s food delivery apps Uber Eats and Postmates.
The service will be rolled out in four pilot markets in the U.S. in the fall.
“Over two-thirds of our stores around the world will have the ability to take orders from Uber Eats,” Domino’s CEO Russell Weiner said in a statement on Monday.
Domino’s total revenue fell 3.8% to $1.02 billion in the three months ended June 18, compared with analysts’ estimate of $1.07 billion, according to Refinitiv IBES data.
But the fast-food chain reported a profit of $3.08 per share, above Refinitiv estimate of $3.05.
(Reporting by Granth Vanaik in Bengaluru; Editing by Shinjini Ganguli)