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Domino’s bets on new loyalty program

Rising comp sales at Domino’s during the third quarter were largely the result of traffic and order-count growth at the pizza-delivery chain, executives said Thursday, a trend they expect to continue with a new loyalty program currently rolling out in Q4.

“We’ve seen what loyalty programs do for customers across many different industries and it was time for us to get in the game,” CEO Patrick Doyle told investors. “We expect to drive order frequency and connect with customers through our unmatched digital experience.”

Doyle added that the program’s success factor lies in its simplicity and transparency, as customers will be able to receive a free medium pizza for every six orders amounting to more than $10. 

The chain’s Q3 results show its continual outpacing of rival Pizza Hut, which saw domestic comp sales flatten year over over during the quarter, while Domino’s rose 10.5 percent.

Revenues at Domino’s increased 8.5 percent from the year-ago quarter, to $484.7 million, largely the result of increased royalties from franchisees and higher revenues from company-owned units. 

“Franchisees and corporate store operators are all in executing at the highest level I have seen during my time as CEO, notably related to service and for our franchisees strategic growth,” Doyle said, adding that “(an) emphasis on innovation and execution continues to fuel tremendous brand momentum.”

Foreign exchange rates cut into Q3 revenues, to the tune of $5.5 million. CFO Jeff Lawrence noted that foreign currency could negatively impact full-year revenues anywhere from $18 million to $20 million, up from the range of $8 million to $12 million the chain estimated earlier this year.  

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