Domino's shares rebound after company announces CEO retirement, weak fourth-quarter results
An employee carries an order for a customer at a Domino's Pizza restaurant in Detroit.

Domino's Pizza on Tuesday announced a C-suite shake-up and quarterly results that missed expectations on most metrics, sending the stock sharply lower.

The pizza chain posted fourth-quarter earnings and revenue that fell short of analysts' expectations and also announced that CEO Ritch Allison plans to retire. Chief Operating Officer and U.S. President Russell Weiner will succeed him as head of the company, effective May 1.

After falling about 8% in trading earlier Tuesday morning, Domino's shares closed flat.

Here's what the company reported for the quarter ended Jan. 2 compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:

Earnings per share: $4.25 vs. $4.28 expected

$4.25 vs. $4.28 expected Revenue: $1.34 billion vs. $1.38 billion expected

The pizza chain reported fourth-quarter net income of $155.7 million, or $4.25 per share, up from $151.9 million, or $3.85 per share, a year earlier. Analysts surveyed by Refinitiv were expecting earnings per share of $4.28.

Net sales dropped 1% to $1.34 billion, missing expectations of $1.38 billion. The company said currency fluctuations, an extra week in 2020 and advertising incentives from promotions contributed to the fourth quarter's decline in revenue.

U.S. same-store sales rose just 1% in the quarter, dragged down by weak performance by Domino's company-owned restaurants. Analysts were expecting U.S. same-store sales growth of 2.9%, according to StreetAccount estimates.

After demand for Domino's pizza and wings soared during the early days of the pandemic, the company has faced tough year-over-year comparisons. It has also had to reckon with a labor crunch that has resulted in shortened hours for some U.S. locations. Allison told analysts on the company's conference call that staffing challenges intensified in the fourth quarter. Locations with the top 20% of staffing levels reported same-store sales of nearly 6%, he said.

"We believe that the sale we saw in Q4 2021 and it seems so far in 2022 for the U.S. business are not indicative of the demand our great brand is capable of generating," Allison said.

He shared that the omicron variant hurt January sales, largely due to a shortage of delivery drivers. He said the company believes that delivery driver staffing will be an issue in the short term, although Domino's is conducting a full assessment of the labor market for any additional actions it can take to mitigate the shortage.

Outside the U.S., the chain's performance also disappointed. International same-store sales rose 1.8% in the quarter, falling short of StreetAccount estimates of 6.6%.

The company added 468 net new locations during the quarter. More than 80% of those new restaurants are located outside the U.S.

In January, the company reiterated its two- to three-year outlook of global retail sales growth of between 6% and 10% and net unit growth of between 6% and 8%.

The chain doesn't provide quarterly or annual earnings forecasts, but it did say it expects costs for ingredients to climb anywhere from 8% to 10% in 2022, roughly three to four times the inflation for a normal year.