Domino’s Pizza Group plc (DPZ, Financial) holds the exclusive master franchise for Domino’s Pizza stores in the U.K., Ireland and Switzerland. We became interested in the company when the stock traded lower due to Brexit fears. Our feeling is that the company still has great growth prospects with an opportunity to grow its store base in the U.K. from under 900 units to over 1,200 in five years. We also think that the company will continue to grow same store sales in the mid- to high-single digits. One reason why we believe this is that Domino’s Pizza customers in the U.S. and Australia order nine times per year on average. In the U.K., while rates have been increasing, customers currently order only five times per year. We think that, over time, this gap will continue to close, helping to lift same store sales in the process.
From Baron Discovery Fund's second quarter 2016 commentary.
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