Javanshir Hajizada gets ready for a bicycle delivery for Domino’s Pizza, which is hiring drivers, on March 25, 2020 in Boston.
David L. Ryan | Boston Globe | Getty Images
Analysts have predicted that delivery-based pizza chains will fare better than other restaurant companies as the country grapples with the coronavirus pandemic. Transactions at fast-food restaurants have plunged 34% in the week ended March 22, according to the NPD Group.
Papa John’s said Tuesday it estimates that North American same-store sales will grow by 5.3% in the first quarter.
Domino’s estimates U.S. same-store sales growth of 1.6% and international same-store sales growth of 1.5% during the first quarter. Meanwhile, the company’s global retail sales are expected to have risen by 4.4% during the same period.
Shares of Domino’s fell 6% in morning trading Tuesday after its preliminary results disappointed investors. Domino’s stock, which has a market value of $12.7 billion, is up 9% so far in 2020.
Papa John’s stock, which has a market value of $1.7 billion, jumped about 6% after sharing its first-quarter same-store sales growth estimates on Tuesday. Shares have fallen 16% in 2020.
Domino’s U.S. same-store sales rose 1% from Feb. 24 to March 22. Domino’s said on Monday that a number of factors impacted its U.S. business, including school closures, cancellations of live sports and U.S. consumers stocking up at the grocery store.
In the same period, Domino’s international same-store sales fell 0.2%.
Papa John’s North American same-store sales increased by 3.6% from Feb. 24 to March 29. International same-store sales fell 0.6% in the same period.
Domino’s CEO Ritch Allison said in a statement that “all but a handful” of Domino’s U.S. locations are open. Fourteen of its international markets have closed, and 23 international markets have partially closed locations. About 1,400 international restaurants have temporarily closed.
About 350 of Papa John’s 2,100 international franchised locations are closed temporarily.
Domino’s withdrew its 2020 outlook related to general and administrative expenses, capital expenditures, food costs and foreign currency.
Papa John’s also withdrew its 2020 outlook. The pizza chain originally forecast adjusted earnings per share in a range of $1.35 to $1.55, North American same-store sales growth in a range of 2.5% to 5% and international same-store sales growth in a range of 1.5% to 4%.
“While the company’s business is currently performing well, there are many uncertainties related to the COVID-19 pandemic which cannot be predicted,” Papa John’s said in a statement.
Citing the market uncertainty, Domino’s has borrowed the rest of the $158 under outstanding variable funding notes to improve its cash position. The pizza chain has more than $300 million of cash on hand.