Domino’s reinstated its title as Pizza King – Domino’s Pizza (NYSE:DPZ)

Monday, Domino’s Pizza Inc DPZ delivered a higher profit, with its financial results fueled by its innovative ’emergency pizza’ offering. Its stock surged as it increased its quarterly dividend by 25% while announcing a billion-dollar buyback. Research firm M Science reported that as of December, Domino’s had a 19% market share among pizza chains over Uber Technologies Inc. UBER Uber Eats platform.

However, like its fast food chain peers, McDonald’s Corporation MCD and Yum Brands Inc, parent company of KFC YUM, Domino’s also indicated that it had suffered the consequences of the conflict raging in the Middle East. Like McDonald’s and Yum Brands, Domino’s found itself among American brands shunned by consumers in light of American support for Israel’s invasion of Gaza. In late January, the Domino’s franchisee which operates its restaurants in Australia, Europe and Asia reported that same-store sales in Asia alone contracted by approximately 8.9% during the second half of 2023. McDonald’s did not did not disclose the exact impact of the boycotts on its sales, but acknowledged that the conflict was creating societal pressure in the countries where it operates. Therefore, Domino’s is not the only one facing backlash, along with McDonalds, Yum Brands, and Starbucks Corporation. SEX also part of the American brands that some customers in the Middle East and Asia have turned their backs on.

Fourth Quarter Highlights

Revenue rose 0.8% to $1.40 billion. U.S. same-store sales rose 2.8%, while international same-store sales rose just 0.1%, excluding currency effects. Domino’s Pizza recorded a strong performance on both sales fronts: delivery and takeout. Its rewards program grew 10% and ended 2023 with 3 million active members. What’s more impressive is that more than 2 million people joined after the rewards program overhaul also increased franchise profits. Domino’s Pizza reported net income of $157.3 million, or $4.48 per share. Despite higher wages and costs linked to its restructuring initiative that reduced margins at its U.S. company-owned stores, lower food costs lifted quarterly earnings per share to $4.48, beating estimates of $4.38.

The Uber Eats partnership is paying immediate dividends.

Partnering with Uber was a smart move that delivered on its promise.

The overhaul of its loyalty program did the trick and sales recovered after a slowdown in early 2023. The delivery partnership with Uber helped Domino’s attract new customers and is expected to continue to do so throughout 2024 also.

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