(Reuters) -Domino’s Pizza topped expectations for the first quarter on Monday, as consumers in the United States tapped into offers through the pizza chain’s loyalty program, driving its shares up nearly 6% before the bell.
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.
“Our growth in the U.S. came through positive order counts in both our carry-out and delivery businesses for the second quarter in a row. Further, this order growth was across all income cohorts,” said CEO Russell Weiner.
Lower food costs and higher franchisee fee also boosted margins in the quarter. Its first-quarter earnings were at $3.58 per share, beating analysts’ estimates of $3.39.
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 demand after a period of weakness.
Domino’s said it remained on track to end the year with 3% or more of its sales coming through the Uber Eats channel.
It is also pushing forward with promotions such as the 50% week-long online discount and offers like giving customers a $3 coupon on online tips of $3 or more to their delivery drivers.
“We believe consumers will continue to react favorably to the value and convenience of Domino’s pizza, helping the firm maintain its market leader position in the U.S.,” said Northcoast Research analyst Jim Sanderson.
Domino’s total revenue for the first quarter rose 5.9% over the year earlier to $1.09 billion, compared with market expectations of $1.08 billion.
(Reporting by Juveria Tabassum; Editing by Shilpi Majumdar)
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