Domino's jumps 7% as company surpasses sales expectations

Domino's has managed to buck a downbeat trend for eating out in the United States, with better returns on its loyalty program and fresh promotional offers drawing inflation-weary consumers to its pizzas and chicken wings.

U.S. same-store sales rose 5.6% in the quarter, beating LSEG estimates of a 4.04% increase.

Domino's said while order count grew both in the U.S. carry-out and delivery businesses across all income cohorts, it grew the most in lower-income consumers.

"Customer responses to deals are stronger than to everyday low prices," CEO Russell Weiner said on a post-earnings call.

Lower food costs and higher franchisee fee boosted margins in the quarter. Its earnings of $3.58 per share beat analysts' estimate of $3.39.

"We believe consumers continue to react favorably to the value and convenience of Domino's pizza, helping the firm maintain its position in the U.S.," said Northcoast Research analyst Jim Sanderson.

Domino's revamped its loyalty program in September last year and entered into a third-party delivery partnership with Uber Eats, helping it rekindle delivery after a period of weakness.

Domino's said it was seeing higher percentage of single-user transactions through Uber Eats than it was through its own channels.

The company is also pushing forward with such as its carry-out "boost" weeks that provide 50% week-long discount and offers like giving customers a $3 coupon on online tips of $3 or more to their delivery drivers.

Domino's said it would add about six boost weeks in 2024.