The pizza business is highly fragmented and subjected to intense competition. Established in 1960 Domino’s Pizza Inc. (DPZ) is one of the largest pizza delivery companies in the US, working as well the international markets with a growing presence. The firm sells and delivers pizza under the Domino’s Pizza brand, and operates its business in three segments, namely Domestic Stores, segment which includes 4,939 franchised stores and 390 company-owned stores, the Domestic Supply Chain, which manufactures dough and thin crust products for almost all stores, owned and franchised, and International segment, with 5,327 franchised stores outside the U.S.
Competing against strong rivals such as Yum! Brands (YUM), Papa John’s (PZZA), Domino’s managed to deliver another outstanding year in 2013, some say due to its great capacity to adapt to the varying market trends and consumers’ preferences. Fourth-quarter 2013 results were indeed above expectations, with earnings up 21.9% year over year, driven by higher top line, margin expansion and lower share count, and revenues increasing 5% year over year due to higher sales both in domestic stores and international units. With increased traffic and higher unit growth, Domino’s seems to be moving in the right path. Expansion is at the order of the day, and international markets seem to be receiving Domino’s with arms wide open, as between 2008 and 2013 the number of stores increased by a 10%. Yet the macroeconomic uncertainty and consumer’s contracted spending capability is always hindering this industry’s firms. Continue Reading »