Yahoo Finance Domino’s Pizza: Q1 earnings call takeaways
Yahoo Finance’s Brooke DiPalma joins the Live show to discuss key takeaways from Domino’s Pizza’s Q1 earnings call.
Video transcript
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RACHELLE AKUFFO: Domino's delivers an earnings beat in its latest quarter, as US same-store sales saw a boost from higher prices and steady demand. But what did the earnings call reveal on for the pizza chain? Here with the lowdown is Yahoo Finance's Brooke DiPalma. Hey, Brooke.
BROOKE DIPALMA: Yeah, lowdown or loaded tots? I mean, that was one of my biggest takeaways from the call this morning, which didn't start until 10:00 AM Eastern, only recently ended. Shares down more than 6%. But those three top takeaways, one of them loaded tots.
Product innovation really driving consumer transaction and ticket size here. They say that they deliver well, that they fit into the mix and match, provide value. They're providing franchisees with a healthier ticket and a strong margin profile. And they also said, in the early signs of those loaded tots' debut, they're performing better than two previous launch products.
And moving right along, investment and delivery and order technology. They said that carryout innovation and delivery innovation were top-two drivers and something that CEO Russell Weiner plans to continue to discuss and provide quarterly updates on.
That includes CarPlay ordering. He said that they're calling it techquity-- technology-equity, that is. They have a history, he said, of leveraging technology here. They said that people ordering on CarPlay is providing a convenient, unique way and a great alternative to orders on the go.
In addition to that, the company heavily investing in a fleet of EV vehicles. They said that, right now, they have the largest electric fleet of EV delivery of 800 cars. They plan to commit to 1,000.
And then the last note here, change in consumer behavior. They added color to that on the call. We saw menu prices increase 6.2% year over year. And, last March, we also lapped that increase of their mix-and-match deal, from $5.99 to $6.99. CFO Sandeep Reddy said that same-store sales increased 3.6%, compared to a prior decrease last year of 3.6%. Here's what drove that.
SANDEEP REDDY: The increase in US same-store sales in Q1 was driven by an increase in ticket, which included the 6.2% in pricing actions I mentioned earlier, partially offset by a decline in order counts.
BROOKE DIPALMA: Now, he also weighed in on US carryout and delivery business. US carryout same-store sales increased by 13.4%. We also saw a decline of 2.1% year over year for delivery, but they expect a moderation in delivery growth for the balance of the year as they lap accelerating growth back in 2022. But they did, in fact, say that delivery is still being challenged by two macro factors here.
SANDEEP REDDY: A migration of demand from the delivery channel to the sit-down channel as the reversion to pre-pandemic consumer behavior continues. Second, constrained budgets for households with relatively lower disposable income, particularly when factoring in fees and tips, prompting them to shift their delivery occasion to cooking at home.
