In a recent interview with CNBC’s Jim Cramer, Domino’s Pizza CEO Russell Weiner elaborated on the company’s revised guidance for its global business, addressing concerns that emerged from challenges faced by a significant international franchisee. Weiner acknowledged the complexities inherent in operating across over 90 markets worldwide, emphasizing that such a vast geographic footprint inevitably includes encountering some obstacles. However, he stressed the advantage of having a diverse array of markets to offset these challenges.
Last week, Domino’s reported an earnings beat, signaling robust financial health. However, the company also revealed potential difficulties in reaching its international store growth target, originally set at an additional 175 to 275 stores. This shortfall is largely due to underperformance by Domino’s Pizza Enterprises (DPE), its largest international franchisee. DPE operates in several key markets, including Australia, New Zealand, France, and the Netherlands. Weiner assured that Domino’s is committed to closely collaborating with DPE to navigate these hurdles, while also highlighting that other international markets, such as China and India, are demonstrating strong performance and growth potential.
Weiner expressed confidence in the resilience and strength of Domino’s U.S. operations, underscoring that the company’s value proposition has never been more compelling. He pointed out that orders have increased across all income segments, benefiting both delivery and carryout services. This robust domestic performance provides a stable foundation for the company as it addresses international challenges.
Additionally, Weiner shed light on Domino’s strategic approach to product innovation and customer satisfaction. He explained the rationale behind the company’s recent launch of the “New York Style” pizza, a product designed to appeal to customers seeking a thinner crust. This move aims to attract a broader customer base, including those who may not have previously preferred Domino’s offerings. “There are some people who don’t like Domino’s pizza because they’re looking for something a little bit more thin,” Weiner said. “This new product is a great way to bring incremental eaters into Domino’s Pizza.”
The interview highlighted Domino’s strategic focus on leveraging its extensive international presence to balance out localized issues and its commitment to ongoing innovation to meet diverse customer preferences. By maintaining a strong domestic market and exploring new product avenues, Domino’s aims to continue its growth trajectory despite the challenges posed by individual markets.
In conclusion, Weiner’s discussion with Cramer offered a comprehensive view of Domino’s current strategy and future outlook. The company’s proactive stance in addressing franchisee challenges, coupled with its strong performance in other international markets and innovative product launches, underscores its resilience and adaptability in the competitive global pizza market.