Domino’s Pizza is starting the fiscal year off strong with Q1 earnings highlights that include 5.6% same-store sales growth driven by transaction growth from the Ann Arbor, Mich.-based company’s new loyalty program.
In a Q1 earnings call on Monday, Domino’s CEO Russell Weiner discussed how the loyalty program is synergistic with other elements of the company’s previously announced “Hungry for More” strategy for 2024, including menu innovation. For example, the new New York Style pizza launching this week, made with thinner crust and a provolone cheese blend, is now available as a rewards deal.
“Domino's rewards members can redeem 60 points for free medium two topping New York style pizza,” Weiner said. “This is another example of how innovation is designed to drive value and more customers into our loyalty plan.”
All roads lead back to the loyalty program: Domino’s highly successful “Emergency Pizza” promotion, which gave away $1 million of free pizzas last fall, was effectively a rebranded “BOGO” coupon, that allowed customers to come back and cash in their free pizza at a later date. For Domino’s, it allowed the company to welcome new customers and lapsed customers back into the fold:
“Emergency pizza performed better than any Buy One Get One Free I've done in my career, with a meaningful driver to our comps in both Q4 of ‘23 and in Q1 of ’24,” Weiner said. “It not only drove increased orders, but also the acquisition of members into our loyalty program…. [These deals] feel more powerful because the talk value is there, and I think that's a great juxtaposition: understanding how we're going to break out from the rest of QSR with the promotions we do.”
Since Domino’s began its first-ever aggregator partnership with Uber Eats, the third-party delivery platform has become another channel through which to introduce new customers:
“Our launch into the aggregator space remains on track to exit the year as 3% or more of sales coming through Uber Eats,” Weiner said. “We’re seeing a higher percentage of single user transactions on Uber than we've seen on our own channel. Further this channel is becoming more promotion-driven. Customer responses to deals are stronger than everyday low price. As a result, we are continuing to work to fine tune our marketing and our offers to ensure that we are effectively driving this channel.”
Additionally, with the Uber partnership, now in its second full quarter of rollout, the company is seeing a better mix of carryout and delivery, as Weiner said in his prepared remarks for the earnings call that Domino’s delivered more pizzas in Q1 24 than Q1 23, and also improved delivery times. This is especially good news since delivery generally boasts a higher average ticket than carryout.
Domino’s revenue for the first quarter of 2024 increased 5.9% from $1.02 billion in the first quarter of 2023 to $1.08 billion. Net income increased 20.1% to $125.8 million or $3.58 earnings per share in the first quarter of 2024, as compared to $104.8 million or $2.93 in the first quarter of 2023. Domino’s opened net 164 new stores in the first quarter for a total store count of 20,755 restaurants globally.
Contact Joanna Fantozzi at [email protected]