Domino's beats U.S. same-store sales estimates on delivery, menu boost

Feb 20 (Reuters) - Domino’s Pizza Inc on Thursday reported U.S. same-store sales above analysts’ estimates for the first time in over a year, as the pizza chain benefited from its focus on faster delivery and new promotions to lure diners.

Sales at U.S. restaurants open for at least a year rose 3.4% in the fourth quarter, compared with estimates of a 2.3% rise, according to IBES data from Refinitiv.

The pizza chain has been opening new stores, launching new menu items and offering faster deliveries to battle competition from rival pizzerias, mom-and-pop stores and aggregators such as Uber Eats, Postmates and GrubHub.

As third party delivery services make it easier for diners to order a variety of food to their door step at the touch of a button, chains like Domino’s have been investing heavily to keep customers coming back for their fast service and offers.

As a part of these efforts, Domino’s offered half off on menu-priced pizzas for online orders during the Cyber Monday week and also expanded its GPS delivery tracking technology across its U.S stores during the reported quarter.

“Our relentless focus on our customers, our franchisees ... helped us deliver a solid 2019 in the face of unique competitive headwinds,” Chief Executive Officer Ritch Allison said.

The Ann Arbor, Michigan-based company has also been aggressively opening new restaurants in a move it calls “fortressing” to facilitate faster delivery to locations beyond homes and offices.

Rival Pizza Hut, owned by Yum Brands Inc, however, reported disappointing results earlier this month as stiff competition took a bite out of sales.

At Domino’s international, however, same-store sales rose 1.7% missing estimates of a 2.09% rise.

Net income rose to $129.3 million, or $3.12 per share, in the three months ended Dec. 29, from $111.6 million, or $2.62 per share, a year earlier.

On an adjusted basis, the company earned $3.13 per share.

Total revenue rose 6.3% to $1.15 billion, beating estimates of $1.13 billion. (Reporting by Nivedita Balu in Bengaluru; Editing by Shounak Dasgupta)