Domino’s share price fell about 13.5 percent July 18 to $409.04 following its investor call.
Domino’s reported positive same-store sales growth systemwide in the second quarter, but anticipates falling short of its international store count goal this year by as many as 275 units.
During the brand’s Q2 earnings call, CEO Russell Weiner said the company predicts falling below its international goal to open 925 units this year by 175 to 275 stores this year. Domino’s suspended its plan to open 1,100 new stores through 2028, Weiner said.
Share price fell about 13.5 percent July 18 to $409.04 following the call.
The missed international target comes “primarily as a result of challenges in both openings and closures faced by” a master franchisee, Domino’s Pizza Enterprises. “We’re partnering closely with DPE as they work through this process.”
DPE is Domino’s largest international franchisee, with more than 3,800 stores worldwide in Australia, New Zealand, The Netherlands and other countries.
But, the U.S. pipeline is “strong,” Weiner said. “And it continues to grow.” Domino’s anticipates opening at least 175 new restaurants annually through 2028 in the United States.
Domino’s CEO Russell Weiner
System sales are up 5.2 percent year over year for Domino’s in the second quarter, according to its earnings call July 18. Sales are up 5.6 percent for the first two quarters this year compared to last year.
In the first half of this year, order counts are up across the board, Weiner said during the call.
Domino’s has more than 20,000 locations worldwide, with system sales hitting $18.28 billion in 2023. Systemwide sales in Q1 this year totaled $4.3 billion, a $2 million increase over 2023.
Same-store sales are up 4.8 percent in Q2 compared to last year for United States franchised locations. So far this year, those sales are up 5.2 percent.
Domino’s changed its loyalty program last year to award customers points for orders over $5, down from the previous $10 minimum. That move increased loyalty members by one million, said Joseph Jordan, president of U.S. and global services on the December 7 investor call.
The pizza giant unveiled its “Hungry for MORE” campaign—a five-year plan to grow systemwide sales more than 7 percent, open another 1,100 stores worldwide and increase operating income growth by more than 8 percent.
MORE stands for most delicious food, operational excellence, renowned value and enhanced by best-in-class franchisees.
Part of the “Hungry for MORE” campaign includes launching two new menu items a year, while avoiding limited time offerings.
Weiner has previously said he’s against raising menu prices without adding value for the customer, if brands are raising prices at all.
Domino’s advertises a $6.99 deal for customers ordering at least two things off the discount menu, from medium one-topping pizzas to cheese bread. The brand increased the price of the promotion from $5.99 in early 2022, but it added more options to the mix and match offering.
“The best way to raise price is to not raise price, and to give people something that they want to pay for,” Weiner said at the Bernstein’s Strategic Decisions Conference May 30. “Then they chose to pay more, versus you telling them to pay more.”