It wasn’t that long ago that Domino’s was the darling of the pizza industry. Its stock was soaring thanks to solid sales, the company’s embrace of technology and a risky but successful mea culpa ad campaign that apologized for how bad its food used to be.
But the Domino’s (DPZ) growth story has grown stale. Shares of Domino’s (DPZ) fell in early trading after the company reported revenue and profit that missed Wall Street’s forecasts and gave a new outlook that was slightly disappointing. But the stock later recovered and was up 2% by late morning.
What’s more, same-store sales in the United States, which measure how well restaurants open at least a year are doing, grew just 2.4% in the third quarter. Sales were up 6.3% in the same period a year ago.
International same-store sales cooled as well, rising 1.7% in the third quarter of this year, compared to growth of 3.3% a year earlier. Domino’s generated half of its revenue from international markets in the quarter. The company, which operates in more than 85 countries, has some 10,000 stores outside the US.
Domino’s now faces tougher competition from a resurgent Pizza Hut. The Yum! Brands (YUM) owned chain has benefited from its sponsorship deal with the National Football League, which is now in its second year.