Domino’s Pizza U.S. Same-Store Sales Grew Just 0.3%. Here’s Why New CEO Joe Jordan Says the Company’s ‘Next Chapter Will Be Our Strongest Yet.’

Domino's Pizza (NASDAQ:DPZ) was one of the best-performing stocks of the 2010s, but the world's biggest pizza chain has delivered more modest results this decade.

In fact, the stock is down 36% over the last five years. After a decade of delivering positive same-store sales growth, Domino's growth has slowed considerably due to inflation and competition from delivery platforms like DoorDash.

In its third-quarter earnings report, Domino's continued to struggle with the stock falling 3.5% on the news.

U.S. same-store sales rose just 0.3%, while international comparable sales rose just 0.2%.

Overall revenue was up 3.4% to $1.19 billion, which was ahead of the consensus at $1.17 billion. Domino's cut back on advertising expenses, which led to a bump in operating income, and earnings per share improved from $4.08 to $4.60, topping the consensus at $4.39.

Domino's continued its expansion, adding 175 new stores in the quarter to bring its grand total to 22,706.

However, the company has just begun a new chapter with new CEO Joe Jordan, who took the helm at the beginning of October.

In the earnings release, Jordan said he wants the company to improve by "getting even closer to our customers, helping our franchisees grow their profitability and turning our best performance into our everyday performance."

Can Domino's be a winner for investors once again? Let's take a look at what to expect as Jordan tries to infuse new life into the company.

Image source: Getty Images.

Where Domino's stands today

Domino's remains the leader of its industry, but all three of the major pizza chains, including Papa John's and Yum! Brands' Pizza Hut have struggled, and the broader fast-food industry has faced pressure due to weakness in discretionary spending.

Domino’s is taking market share from those two rivals, but it hasn’t been enough to please investors. The company is seeing smaller average ticket sizes and fewer items per order, indicating that many of its customers are facing financial pressure, including from higher gas prices. The company has also been using discounts to protect its market share and drive traffic, which is impacting the average ticket.

As a result, Domino's is also getting pushback from franchisees, who are reluctant to expand in such an environment, and the company cut its store-growth guidance in the U.S. to 125-150 net new stores due to profitability pressures.

What it means for Jordan and Domino's

None of these challenges will be particularly easy for Domino's to solve. The stock's surge in the 2010s came as it overhauled its recipes in response to complaints about low quality, and then CEO Patrick Doyle touted the improvements in an advertising blitz.

Now, presumedly, the food quality isn't the problem. Domino's, which is known for low prices and serves an economically sensitive demographic, is feeling more pressure from inflation and high gas prices than many of its peers, and the proliferation of delivery apps has made its delivery model less unique.

Domino's is stlll stable with flattish comparable sales and solid profits, and it is returning capital to shareholders through dividends and share buybacks. However, returning to the kind of growth investors saw in the 2010s won't be easy for Jordan, and it will take time, if the company gets there.

The stock is reasonably priced, but I'd like to see stronger growth before I call it a buy.

Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Domino's Pizza. The Motley Fool has a disclosure policy.