Domino’s has its sights set on more than just dominating the U.S. pizza delivery market.
In this video from “Beat & Raise” from Motley Fool Live, recorded on Oct. 14, Fool contributors Parkev Tatevosian and Demitri Kalogeropoulos discuss the chain’s international store growth ambitions in the context of its recent earnings results.
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Parkev Tatevosian: Getting into the investor presentation, what jumps out at us here, is the total enterprise stores is about over 18,000, but that’s heavily skewed internationally, 11,600 of the total 18,000 is international. However when you look at the retail sales breakdown in the most recent quarter, it was evenly split two billion each domestically and internationally. Despite having nearly twice as many stores in international locations, retail sales are holding up very well domestically. This trend of an increasing ratio of international stores continued in the third quarter, the company opened a net 278 new stores internationally and 45 domestically.
Solid new store growth for the most recent quarter and the challenges in the US that you mentioned earlier with labor shortages and supply shortages certainly held back some of that’s new store growth. Still over the last four quarters, despite being in a global pandemic, they impressively added over 1100 new stores, 892 of them coming from internationally. Despite all of the challenges of doing business during the pandemic and the labor shortages and the difficulty of finding people willing to work when there is a virus in circulation, there were still able to open so many new stores.
Demitri Kalogeropoulos: Yeah, it’s a good point certainly international. I think a lot of people are more excited about the international runway for growth because the US markets mature but there’s still growing like you pointed out in the US. I was curious. I went to the SEC filings to see how just get a little context there on that global number that you mentioned, around 18,000 global stores. That was only below 15,000 at the start of 2018. That’s some fast growth and Domino’s, is nowhere close to saturating big markets like India, Japan, Europe. Pretty cool.
Tatevosian: Absolutely. I think we will get into more of that there are opportunities internationally over the next few slides, but like you mentioned, there’s a lot more potential internationally versus domestically.