Domino's quarterly profit misses even as pandemic boosts pizza demand

REUTERS: Domino's Pizza Inc reported a smaller-than-expected profit on Thursday, as high COVID-19-related costs and staff bonuses offset a jump in demand for pizzas during the coronavirus crisis.

Shares of the Ann Arbor, Michigan-based company, which have risen about 47per cent this year, were down about 5per cent before the bell.The world's largest pizza chain has thrived during the health crisis as diners staying at home craved more comfort food, but that came at a cost for the company, which spent millions on hiring more staff, bonuses, sick-pay policies and sanitary supplies.

Still, sales at Domino's U.S. stores open for more than a year rose 17.5per cent in the third quarter ended Sept. 6, exceeding Wall Street estimates of 13.14per cent, according to IBES data from Refinitiv. The resumption of sports leagues such as the National Basketball Association and the National Hockey League has also boosted demand for pies and chicken wings.

Domino's has been focusing on tech innovations and has also broadened its menu with additions such as chicken tacos and cheeseburger pizzas in order to keep its customers from switching to rivals McDonald's , Papa John's and Pizza Hut , among others.The company reported net income of US$99.1 million, or US$2.49 per share, compared with US$86.4 million, or US$2.05 per share, a year earlier.General and administrative costs rose 9.5per cent to US$91.7 million.

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