(Reuters) – Domino’s Pizza beat US quarterly store sales estimates on Thursday, seeing steady demand for pizza and chicken wings boosted by the company’s deep discounts amid rising inflation.
Shares of the Michigan-based company rose about 7% in pre-market trading.
Domino’s, which posted a 2% increase in same-store sales in the US in the third quarter, is doubling down on discounts and promotions, offering cheaper meals and “inflation relief” deals. This helped the company attract consumers looking for more pocket-friendly offers.
In August, Domino’s offered 50 percent off pizzas ordered online as part of its “Promotion Week” promotion and in September got another 20 percent off their online orders.
However, the company has not been immune to the pressures of high inflation for decades that have forced Domino’s and many other restaurants to raise prices on some menu items as labor and raw material costs for items such as wheat, dairy and fuel rise.
However, price increases failed to protect Domino’s profit margins, while also taking a hit from a stronger US dollar.
The company earned $2.79 per share in the quarter ended September 11, missing expectations of $2.97 per share, according to Refinitiv data.
Domino’s international store sales fell to 1.8%, compared to a jump of 8.8% last year, which was nonetheless roughly in line with analyst expectations.
Overall, total revenue rose 7% to $1.07 billion, beating previous estimates.
