© Reuters. FILE PHOTO: A Domino’s Pizza restaurant is seen in Los Angeles, California, U.S. July 18, 2018. REUTERS/Lucy Nicholson
(Reuters) -Domino’s Pizza Inc fell short of quarterly U.S. same-store sales estimates on Thursday, in a sign that price hikes were eating into demand for the company’s pizzas and chicken wings amidst decades-high inflation.
Shares of the Michigan-based company dropped 5% to $330.11 in premarket trade.
The world’s largest pizza chain, like other fast food companies, has been wrestling with elevated costs of transportation, labor and raw materials, and raised prices of its menu items over the past year, a move analysts say could weigh on orders from inflation-hit consumers.
Domino’s has also been facing acute staffing shortages, especially of delivery drivers at its U.S. stores, which has lengthened delivery times and dented sales of its pizza and chicken wings.
Its U.S. same-store sales climbed 0.9% in the fourth quarter, compared with a 3.69% rise expected by analysts according to Refinitiv IBES data.
Total revenue rose to $1.39 billion in the three months ended Jan. 1 from $1.34 billion a year earlier, compared with analysts’ estimate of $1.44 billion.