Domino’s Pizza has reported a stronger-than-anticipated quarterly performance, leading to a rise in its stock prices as the company outlined ambitious growth objectives. The pizza chain’s latest report highlighted a remarkable same-store sales growth of 3.7%, surpassing analysts’ expectations of 3.1%. Revenues reached $1.54 billion, exceeding the anticipated $1.52 billion, amid challenges faced by the broader pizza and restaurant sectors.
In an interview, CEO Russell Weiner expressed optimism for the company’s future, stating, “I want people to understand that I think we can double this business, and it’s not a stretch, given our track record, and given how we are in other markets.” This confidence comes as Domino’s capitalizes on a growing trend among lower-income diners, who have shown increased interest in the value offerings available on its menu.
The quarterly results are particularly striking in contrast to those of Domino’s primary competitors, Pizza Hut and Papa John’s, both of which are currently encountering significant challenges. Recent rumors suggest that both Yum Brands’ Pizza Hut is undergoing a strategic review and that Papa John’s is facing its own struggles. While Domino’s stock has seen a decline of approximately 3.6% this year, its rivals have faced even steeper losses—with Papa John’s stock dropping by 13.8%.
Weiner attributed Domino’s success to its focus on providing value through its core menu items, often referring to this strategy as discounting on the center of the plate. He emphasized that, while the overall pizza market is growing at a modest rate of 1 to 2%, Domino’s has significantly increased its market share over the past 11 years. He noted, “The only disruption in the pizza category is the disruption that we’re causing.”
Additionally, the latest growth metrics were driven by an increase in transaction volume rather than higher order values—a trend mirrored by major players like McDonald’s and Starbucks. Weiner highlighted the increased spending among lower-income consumers as a key driver of this growth, coining the term “profit power” to describe the company’s ability to maintain profitability while offering lower prices to attract more customers.
“We can sustain this price and make money,” he continued. “Why would we want to take price and feed less consumers if we can maintain and grow our franchisees’ profitability on this lower price and still take share?” By leveraging its value-oriented strategy, Domino’s aims to solidify its position in a rapidly evolving market landscape.
