As it contended with delivery aggregators, Domino’s Pizza Inc. saw its quarterly profit and same-store U.S. sales come out ahead of analysts’ forecasts. The company did not see a ramp-up with digital aggregators as it has seen in previous quarters, but Chief Executive Officer Ritch Allison noted in an earnings call with analysts on Thursday (Feb. 20) that the pressure is still there.
He said aggregators are standing in a “circular firing squad right now.” And the aggregators are going to keep advertising and discounting because he thinks they don’t have any choice. And, while the firm is not in the middle of the firing squad, he said, “we might get hit by a few stray bullets along the way.”
When it comes to digital efforts, the company hit a milestone in 2019 with 25 million active loyalty members. It now has 40+ million enrolled in its loyalty program and more than 85 million customers in its database. The pizza chain has been rolling out new products, opening new locations, and providing quicker delivery to combat rivalry from mom-and-pop shops, competing with pizzerias, and third-party aggregators like Grubhub, Postmates and Uber Eats.
Over Cyber Monday week, Domino’s offered half off menu-priced pizzas for eCommerce orders. It also grew its GPS delivery tracking technology throughout its American stores over the quarter.
The quick-service restaurant (QSR) chain had Q4 global net store growth of 492 locations, which was made up of 351 net new international stores and 141 net new U.S. stores. In fiscal 2019, the company opened 1,106 net new stores, made up of 856 net new international stores, and 250 net new U.S. stores. The firm is also opening three new supply chain centers in 2020, Allison said on the earnings call.
In January, Domino’s brought a new supply chain center to Winnipeg. The company’s Columbia, South Carolina center will open in the first half of 2020, while the Katy, Texas, center will open in the second half of the year. It will also be adding a thin crust line to its existing Edison, New Jersey supply chain center, which is also scheduled to open in the second half of this year.
Net income arrived at $3.12 per share, or $129.3 million, for the three months that concluded on Dec. 29, an increase from $2.62 per share, or $111.6 million, a year prior. The QSR firm earned $3.13 per share on an adjusted basis, which was 15 cents higher than forecast. Total revenue exceeded estimates of $1.13 billion, arriving at $1.15 billion.
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