Retail

Domino’s Eyes AI After Beating First-Quarter Estimates

Dominos

Domino’s Pizza beat revenue and earnings estimates for the first quarter, citing strong domestic and international growth. The pizza chain reported diluted earnings per share (EPS) of $2 and revenues of about $785 million, beating analysts’ estimates of $1.77 and just under $692 million respectively.

Domino’s President and Chief Executive Officer J. Patrick Doyle said in an announcement, “The first quarter of 2018 was another outstanding performance by our franchisees and managers across the globe. We delivered in every way: from global retail sales growth through strong domestic and international same store sales comps, to new stores, and through both delivery and carryout.”

In terms of delivery, Doyle said during the company’s Thursday (April 26) earnings call that Domino’s reported “significant growth” during the quarter. In fact, Domino’s delivery business grew faster than its carryout business in the first quarter. That marks a departure from previous quarters, when carryout typically grew faster than delivery. Still, Doyle sees carryout orders as a “prime incremental opportunity.”

Though Domino’s isn’t always perfect in delivery, Doyle wants to keep its delivery experience in-house: He sees owning its own delivery experience as a competitive advantage. In addition, Doyle said this arrangement provides for the most affordable delivery platform for franchises. Doyle also singled out third-party delivery aggregators that “attempt to play in our space of expertise.”

Doyle said on the call, “Delivery-aggregator economics remain challenging and unproven, and those making attempts to succeed in this space are likely realizing [something] we have known for almost six decades: Delivery is hard.”

And, in terms of technological innovation, Domino’s expanded the range of places where it will deliver orders. Through a feature called “Hotspots,” customers can have Domino’s delivered to thousands of parks, beaches, sports fields and other locations.

“The ability to now deliver to spots without a traditional address, and other rather unexpected sites, will not only continue to drive incremental orders in the near term, but it is yet another meaningful step in our mission of industry-leading convenience,” Doyle said on the call.

Beyond adding new delivery locations, Doyle said the company is working on artificial intelligence (AI) for order-taking. The company wants the technology to handle all of its phone orders through its virtual assistant named Dom.

“Fundamentally, we are on a path to take orders digitally,” Doyle said during the call. “It allows our store-level teams to focus all their efforts on making great pizzas and giving great service to our customers.”

Doyle added: “This could be a game changer for us and our customers.”

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