Uber Eats and other third-party delivery services take a bite out of Domino’s Pizza
Domino’s Pizza Inc. DPZ, +0.02% Chief Executive Richard Allison said third-party delivery services like DoorDash and Uber Eats UBER, -0.84% were a challenge during the second-quarter, and they aren’t going away. "Our same-store sales performance for the quarter came in toward the lower end of our three-to-five-year outlook as we continue to navigate through headwinds related to aggressive activity from third-party aggregators," he said, according to a FactSet transcript. "I do not expect this activity to ease in the near term." Domino’s reported a second-quarter revenue miss and same-store sales growth that missed expectations. "Domino’s Pizza remains on the ‘Biggest Concerns List’ from CFRA Forensic Research Services, partly on sales and profit margin pressures and reduced operating leverage," wrote CFRA’s Tuna Amobi in a note. CFRA maintained its hold opinion on Domino’s stock but cut its price target to $270 from $290. BTIG remains bullish. "We maintain our buy rating on shares of Domino’s Pizza following earnings as we believe the retail sales and market share gains the concept is generating will ultimately translate into a higher stock price," wrote analysts led by Peter Saleh. "While disappointed with domestic same-store sales results this quarter, new unit and retail sales growth remains healthy and we believe the stock’s decline is more a function of elevated expectations rather than inflated valuation." BTIG cut its price target to $325 from $335. Domino’s Pizza shares closed Tuesday down 8.7%, but are nearly unchanged in Wednesday trading. The stock has fallen 12.5% over the last year while the S&P 500 index SPX, -0.39% has gained 6.6% for the period.
Source: Read Full Article