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Can Domino’s Be Stopped?


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It’s that time of year again: leaves falling, temperatures chilling and, once again, Domino’s is the star of the quarterly earnings show. On the eve of my trip to the pizza giant’s headquarters in Ann Arbor, Michigan, I’m writing questions and wondering if this high-tech pizza brand can be stopped in light of its 22 consecutive quarters of positive sales growth. 

In reporting its Q3 ‘16 financial results, Domino’s reported same-stores up 13 percent during the quarter, very strong international sales growth—91 consecutive quarters of int’l SSS growth—store growth of 316 stores and diluted EPS that’s up more than 43 percent over the prior quarter.

It’s not just restaurant analysts, industry media and investor groups that are impressed: DPZ is officially one of the Wall Street darlings of the year and there’s no end in sight. The number of non-industry media outlets running stories about Domino’s success is intimidating, I would assume, for the company’s leadership that’s reaping the benefits of a massive, multi-year investment in technology.

Some of that attention-getting technology might be click bait—chatbot ordering, emoji ordering, smartwatch ordering—but maybe the company knows something I don’t about what millennials want.

That massive R&D spending is the highlight of almost all Domino’s stories these days, and it reminds me of something a very smart franchise industry analyst told me about a few massive fast-food brands that shall not be named: brands that run themselves like a restaurant brand rather than a financial company have the advantage going forward, whether or not a true restaurant recession breaks out.

Investing in technology, product, marketing and internal systems will always win over an exclusive focus on the next quarter’s results. There are countless examples in franchising, and I hope such sad, fading brands can take a page or two from Domino’s.

In the meantime, I’ve diving back into financial results and analyst commentary as I draft a hefty array of questions for the Domino’s C-suite. I’m open to any suggestions, so don’t be shy.

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The latest news, opinions and commentary on what's happening in the franchise arena that could affect your business.

Tom KaiserTom Kaiser is associate editor of Franchise Times. He can be reached at 612.767.3209, or send story ideas to tkaiser@franchisetimes.com.
 
Beth EwenBeth Ewen is editor-in-chief of Franchise Times. She can be reached at 612.767.3212, or send story ideas to bewen@franchisetimes.com.
 
Nicholas UptonNicholas Upton is staff writer at Franchise Times. He can be reached at 612.767.3226, or send story ideas to nupton@franchisetimes.com.
 
Mary Jo LarsonLaura Michaels is managing editor of Franchise Times. She can be reached at 612.767.3210, or send story ideas to lmichaels@franchisetimes.com.
 
Mary Jo LarsonMary Jo Larson is the publisher of Franchise Times Magazine and the Restaurant Finance Monitor.  You can find her on Twitter at
 twitter.com/mlarson1011.
 
Nancy WeingartnerNancy Weingartner is editor-at-large of Franchise Times magazine and the editor of the Food On Demand media project. You can reach her at 612-767-3200 or at nancyw@franchisetimes.com.
Follow her on Twitter at http://twitter.com/nanweingartner.
 

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