Domino's used a combination of value messaging and a stuffed crust pizza to generate strong sales in the third quarter despite an otherwise brutal market for both the fast-food industry and pizza chains in particular.
The Ann Arbor, Michigan-based chain said Tuesday that its same-store sales rose 5.2% in the third quarter ended Sept. 7, its 13th increase in the past 15 quarters, since a 2022 slump ignited an overhaul of company management.
Domino's generated sales through both carryout and delivery, though some of that delivery business is ordered through third-party aggregator apps Uber Eats and DoorDash. The company said its "Best Deal Ever" promotion—offering any pizza for $9.99—and a stuffed crust pizza both drove sales in the period.
“Our carryout business was positive, our delivery business was positive and our order count was positive,” CEO Russell Weiner told analysts on Tuesday. “All of this resulted in meaningful market share growth.”
Shares of Domino's stock were up nearly 4% in premarket trading Tuesday.
Executives cited the company’s “Best Deal Ever” promotion in particular for its results. The company said that the deal has resonated because customers can order what they want and get a deal in the process.
They also said that franchisees can profit from the deal because Domino’s uses its size to ensure their costs are low enough. Operators demanded the deal be extended, Weiner said. “The price point screams renowned value,” Weiner said. “Consumers are building and eating their dream pizzas.”
International same-store sales at Domino's increased 1.7%. The company added 214 locations worldwide in the quarter, including 29 net store openings in the U.S. Domino's now operates 7,909 locations in the U.S. and another 14,660 locations internationally.
Global retail sales in the period increased 6.3% to $4.7 billion. Net income fell 5.2% in the quarter to $139.3 million, or $4.08 per share.
Domino's has ignited its recent run of sales growth through a combination of strategies, including more aggressive marketing focused more on its food than on its technology changes that had driven its pre-pandemic sales results. The company recently introduced new colors and branding designed largely to highlight that shift.
The company has also acquiesced to the growth of third-party aggregators, inking deals to market its pizzas on the apps as a way to reach more customers. Domino's does the delivery itself and believes it can generate an enormous share of sales through that channel.
But it has also generated strong sales growth through carryout, as the company's aggressive unit openings make consumers more amenable to getting pizzas themselves. The chain's remodels a decade ago, along with new technology such as digital order boards and warm pickup shelving, also helped drive sales through that channel.
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