Domino's To Do Some Heavy Lifting To Buoy U.S. Sales
In a conference call with analysts, CEO David Brandon described what he calls a "barbell strategy that is appropriate for us."
One end is the current 4-4-4- promotion that offers a 10-inch pizza for $4, which Brandon said provides an alternative for customers looking for "a smaller-ticket opportunity to participate in the brand."
The other end is a premium line that would appeal to "many of our customers who enjoy that kind of product who are not as price-sensitive." The brand has two or three product platforms as a result of limited-time-only promotions that have been successful. "Some may be resurrected as part of our premium line," he said. "Others are going into test and we'll round out that line. When and how it evolves" is still undetermined.
First-quarter earnings rose 68% to $14.1 million, or 23 cents a share, compared to last year for the Ann Arbor, Mich.-based company--mainly as a result of Domino's earnings that fell 68% in the first quarter of 2007 due to the costs of a large recapitalization plan it was executing.
Revenue in the first quarter dipped slightly to $339 million.
Sales slid 5.2% percent in the first three months of 2008 compared to the same time in 2007, while sales at its international stores increased 8.8%. Overall global retail sales--which considers sales at all Domino's 8,641 stores--rose 5.6%, buoyed by pizza sales abroad.
Domino's also intends to test products that would create new sales opportunities at lunch and late-night.
"We plan on selling a lot of pizza at lunch," Brandon said.