Domino's Pizza to Scale Back Store Openings in 2024; Misses Sales Estimates

Domino's Pizza announced on Thursday that it will open fewer stores than initially expected in key international markets due to weakened demand from cost-conscious consumers. The world's largest pizza chain revealed that its target to open more than 925 international outlets this year will fall short by approximately 275 stores. This reduction follows a decision by its Australia-based master franchise to close underperforming stores in Japan and France.

As a result of this news, Domino's shares dropped nearly 12% in premarket trading. The company also suspended its long-term goal of opening 1,100 net global stores annually. Jim Sanderson, an analyst at Northcoast Research, expressed concern, noting that international unit growth was a significant component of Domino's long-term strategy.

Domino's reported a 4.8% increase in U.S. same-store sales for the quarter, just below analysts' expectations of 4.9%. International same-store sales grew by 2.1%, also missing the anticipated 2.5% growth, according to data from LSEG.

The slower growth in U.S. food services in June suggests that consumers are still cautious with their spending, despite a stronger-than-expected overall U.S. retail sales report, which points to economic resilience.

Domino's has been targeting budget-conscious consumers through its updated loyalty program in the U.S. and several promotional offers aimed at attracting more customers.