Shares of Domino's Pizza whipsawed in early morning trading on Tuesday after the company posted the highest domestic same-store sales growth of the top 25 U.S. restaurant chains, but fell short of international same-store sales estimates.
Domestic same-store sales growth rose 12.2 percent in the fourth quarter for the pizza chain, well above KFC, which now has the second-highest same-store sales growth, having posted growth of 4 percent.
Domino's ongoing U.S. "success" can be attributed to multiple factors, Mark Kalinowski, an analyst with Nomura-Instinet, wrote in a research note Tuesday. He cited Domino's digital strength as more consumers opt to order pizza digitally, its "single-brand focus," effective marketing, efforts to improve the quality of its food, and its Piece of the Pie Rewards loyalty program, which was rolled out nationally in late 2015, as the engines of its growth.
While domestic same-store sales exceeded expectations, with company-owned stores posting growth of 13.7 percent against estimates of 10 percent and franchised locations growing same-store sales 12.1 percent versus forecasts of 9.8 percent, international same-store sales were lower than expected.
International same-store sales grew 4.3 percent. Wall Street had expected same-store sales to be up 5.8 percent.