Domino’s Digital Deliveries Boost Q4 Sales

“Our digital lead remains unquestioned and our innovative ordering platforms unmatched," CEO Patrick Doyle says.
Matthew HellerFebruary 28, 2017
Domino’s Digital Deliveries Boost Q4 Sales

Domino’s Pizza is continuing to outdo its pizza chain rivals, posting double-digit same-store sales growth for the fourth quarter that easily beat analysts’ estimates.

Comp sales at company-owned outlets in the U.S., Domino’s biggest source of store revenue, jumped 13.7% in the three months ended Jan. 1, while sales at domestic franchise units open at least one year were up 12.1%. Analysts had expected growth of 10.5% and 10.3%, respectively.

Domino’s on Tuesday also reported fourth-quarter earnings of $1.48 a share on $819 million in revenue, topping analysts’ estimates of earnings of $1.44 a share on $782 million in revenue. It has now posted 23 consecutive quarters of positive domestic same store sales growth.

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Rival Pizza Hut, which is owned by Yum Brands, saw its U.S. sales fall 4% in the fourth quarter while other chains posted disappointing results.

Domino’s international same-store sales increased 4.3%. CEO Patrick Doyle attributed the sales gains to its digital growth, plus the opening of a record 1,281 restaurants in 2016.

“Our digital lead remains unquestioned and our innovative ordering platforms unmatched,” he said in an earnings call.

As Reuters reports, the world’s largest pizza delivery chain “has managed to stay ahead of competition by effectively using technologies such as digital wallets and apps for smartphones and smartwatches that help customers place and pay for orders quickly.”

Domino’s generated 60% of its U.S. sales from mobile devices in 2016. “Now it’s clear that when consumers wanted to order pizzas from the comfort of their couches during Super Bowl LI, Domino’s was the top choice: they had the option of ordering with their smartphone or through Twitter,” TheStreet said.

Doyle said Domino’s will continue its “competitive” approach to digital growth, not only in the U.S., but internationally in 2017, with plans to increase e-commerce investments.

Analysts believe Domino’s has been taking market share from Pizza Hut and other rivals. Pizza Hut “has partly blamed its image as a sit-down, red-roofed restaurant for its slumping sales,” The Associated Press said.