(Reuters) – Domino’s Pizza (NYSE:) posted a smaller-than-expected rise in third-quarter U.S. same-store sales on Thursday as consumers curbed spending on dining out.
Despite inflation easing in the U.S., menu prices that rose over the last two years have kept consumers wary of shelling out money in restaurants. They have instead responded to steep discounts and special offers.
As a result, competition has heated up in the fast-food industry with burger chains, including McDonald’s (NYSE:) and Burger King, offering some meals at price points around $5.
The “burger wars”, as they have come to be known, could also be pressuring demand for Domino’s usually value-driven pizzas, analysts have noted.
Same-store sales in the U.S. grew 3% in the third quarter ended Sept. 8, compared with expectations of 3.6% rise, according to estimates compiled by LSEG.
Domino’s now expects annual global retail sales for 2024 to grow about 6%, as against an earlier forecast of 7% growth. The company expects 2025 global retail sales growth to be roughly in-line with the current year.
The world’s largest pizza chain also had only one boost week in the third quarter, where it offers 50% off on online orders. This compared with two in the second quarter.
For July through September, foot traffic at Domino’s grew 8.3% on an average, compared with a year ago, slower than the average 10.7% growth in April-June, according to data from Placer.ai.
Fast food chains are also facing weak demand in some international markets. Domino’s reported international same-store sales growth of 0.8% in the third quarter, compared with expectations of a 2.9% rise.
Domino’s now expects global net store growth of between 800 to 850 this year, compared with earlier target of about 825 to 925 new stores.
Third-quarter diluted earnings per share came in at $4.19, compared with estimates of $3.65.