Operations

Labor market challenges, inflation play role in Domino’s Q2 earnings

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July 21, 2022

Domino's Pizza saw U.S. same store sales drop 2.9%, international same store sales decline 2.2% and global retail sales dip, without adjustment for foreign currency impact, 3.0% in the second quarter of 2022.

Major reasons are the continuing labor challenges in the foodservice industry, as well as increasing inflation, according to a press release on the quarterly earnings.

"Our results for the quarter faced challenges consistent to those I outlined back in April. We continued to navigate a difficult labor market, especially for delivery drivers, in addition to inflationary pressures combined with COVID and stimulus-fueled sales comps from the prior two years in the U.S.," Russell Weiner, Domino's CEO, said in the release. "However, the strength of our franchisees and team members, along with the strategies we are putting into place, make me confident we are on a path to overcome these short-term obstacles and make the Domino's brand and business stronger than ever."

The decline in international same store sales (excluding foreign currency impact) was driven in part by a value added tax holiday in the U.K. that did not recur in the second quarter of 2022, according to the release. The brand had a global net store growth of 233 locations — 22 in the U.S. and 211 in the international business.

Diluted EPS for the second quarter of 2022 was $2.82, a decrease of 7.8% from diluted EPS of $3.06 in the second quarter of 2021. This was due to expenses associated with the company's April 2021 recapitalization transaction.

The quarterly earnings report comes just about two weeks after Domino's U.K. division tapped Edward Jamieson as chief financial officer effective in October, according to a Morningstar report. Jamieson will replace interim CFO David Surdeau, who took the interim position in November 2021.