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Domino's Pizza Group reported a decline in meal deliveries during the third quarter. As customers grapple with higher living costs, they have cut back on ordering, impacting the company's sales.
Domino's Pizza’s Sales Performance and Total Orders
Reuters reported that despite the decrease in meal deliveries, Domino's Pizza Group experienced a 3.7% increase in like-for-like system sales. However, total orders were down by 1.2% to 16.7 million in the third quarter. This decline in orders caused the company's stock shares to decrease by as much as 6.7% in morning trade, according to MarketWatch.
To keep up with rising costs, Domino's Pizza Group raised the prices of its products. Unfortunately, customers who are feeling the pinch from interest rate hikes and a slowing economy have cut back on discretionary expenses, including food delivery.
Looking ahead, recently appointed Chief Executive Andrew Rennie stated, "As we look into the next year, we see inflation stabilizing and our focus will be on continued customer and order growth, as well as franchisee profitability." The company aims to address customer preferences and expand its order volume.
Domino's Pizza’s Financial Outlook
Domino's Pizza Group, a franchisee of U.S.-based Domino's Pizza Inc, acknowledged tepid performance in its delivery segment. Inflation-weary consumers were discouraged by higher charges, resulting in reduced orders. The company aims to address this issue moving forward.
Domino's Pizza Group continues to anticipate underlying core profit in the range of 132 million pounds to 138 million pounds. With a focus on customer and order growth, as well as franchisee profitability, the company aims to maintain its financial stability.
In the fourth quarter, Domino's Pizza Group experienced a rebound in total orders, prompting the company to reaffirm its underlying core profit outlook for the year. Despite the challenges faced in the previous quarter, the company remains optimistic about its future performance.
Photo: Domino’s Pizza Newsroom
