Domino's Pizza Q3 Earnings Fall Below Expectations, CEO Sees Growth Opportunity In Carryout Business

Domino's Pizza Inc. (DPZ) released its third-quarter earnings report Tuesday, with results falling below Wall Street's expectations. Revenue was at $820.8 million, in contrast to the expected $823.1 million.

Domestic same-store sales were up 2.4% rather than the 2.6% expected. Internationally, same-store sales were up 1.7% over the expected figure of 2.8%.

Domino's CEO Ritch Allison said "It was a good quarter for Domino's as we continue to lean on our fundamental strength against a unique competitive environment."

The rise of delivery apps such as Grubhub, Uber Eats and Doordash have become strong competition for traditional pizza delivery companies such as Domino's. These mobile apps enable traditional restaurants to have their own delivery service, giving consumers more options.

During the Tuesday earnings call, Allison emphasized the strength of Domino's carryout business, seeing it as an opportunity for growth. Carryout offers higher profit margins, as there is no need to pay a driver.

Allison said that nearly 45% of Domino's sales came from carryout during the third fiscal quarter.

Domino's has performed strongly in the quick-service pizza market, beating out competitors Pizza Hut and Papa John's. Pizza Hut has been trying to streamline its business by getting rid of dine-in locations and Papa John's has struggled after multiple controversies involving former CEO John Schnatter.

Domino's has mostly recovered from what was perceived as a negative reputation.

In the early 2000's the company saw sluggish sales due to customers disliking the taste of the pizza. In late 2009, the company started airing self-deprecating commercials which acknowledged the poor taste of the pizza, promising customers that they have improved their product.