Domino's jumps 5% thanks to its secret weapon: carryout (don't call it takeout)
Toss some mozzarella on the wounds... Domino's shares ended the day up 5%, but it's stuck in the middle of 2 wars right now: #1 is the "The Pizza Wars." They caused the carb-packed chain's quarterly sales to slow to just 2.4% growth. Here's how the competition and their stocks are doing this year:
- YUM Brands — up 24%: The owner of Pizza Hut has the deal with the NFL to cover your Sundays in pepperoni.
- Papa John’s — up 35%: There's a new CEO, and investor Shaq is even opening up his own-branded Papa locations (size 22 shoe-prints included).
- Domino’s — down 1%.
#2 is The Delivery Wars... Domino's is stuck in them too. Postmates, DoorDash, GrubHub, and Uber Eats are delivering pizza — and gyros. And quinoa salads. And late-night grilled cheese. The optionality of 3rd party delivery apps are snagging loyalty from hangry 20-somethings. The Domino's faithful like to mix up dinner every now and then.
Search for your profit puppy... Domino's profit-driving revenue source is “carryout.” That's the same thing as takeout or pickup, but Domino's CEO dropped the term 17 times on the earnings call. Carryout makes up 45% of Dom's sales and is more profitable than delivery because they don't have to pay a delivery driver. The CEO's plan for more carryout is why investors bought up Domino's shares Tuesday.