Domino's Has Room to Win more Market Share

© supplied by The Motley idiot Domino's Has Room to Win greater Market Share

Domino's Pizza (NYSE: DPZ) these days introduced strong working results in its fiscal third quarter. yes, sales declined for the primary time in years. however the pizza start leader's company is never shrinking.

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during this video from "Beat & raise" from Motley idiot live, recorded on Oct. 14, fool contributors Parkev Tatevosian and Demitri Kalogeropoulos go over a portion of management's investor presentation that summarizes Domino's market share capabilities.

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Demitri Kalogeropoulos has no place in any of the stocks mentioned. Parkev Tatevosian has no place in any of the shares outlined. The Motley idiot recommends Domino's Pizza. The Motley fool has a disclosure policy.

Demitri Kalogeropoulos: moving right down to the subsequent highlighted slide right here from management. this is a breakdown of simply what administration sees, why they like the category that they're competing in. They call it a robust becoming and fragmented category. i may simply give you some highlights of what their practicing and this numbers not from the end of 2020. it be no longer going to trade tons within the ultimate six months or so, however Domino's, of route is in the pizza industry, pizza quickly food abbreviation on the side right here, QSR and that is the reason brief serve, just name that quickly food. that is a great estimate there.

The world business is round $85 billion is what they may be estimating. As which you can see there, a bit bit extra skewed toward international. but U.S. is a big a part of that, absolutely the only greatest. Domino's is accounting for round, I suppose 16 billion or so of systemwide sales is around that estimate so out of that 85. really some room to grow. but what else fantastic about this colossal, transforming into market that has an international and the U.S. element is that there is constant boom. We're speakme fast food there is. when you consider in regards to the most important quick community gamers, there is like the burgers and sandwiches division. it truly is where like McDonald's is dominant and there is Tex-Mex. but pizza I trust is correct below that sandwich category. simply well-nigh usual enchantment.

additionally, if pizza isn't in reality universal in a definite nation, Domino's has loads of flexibility in their menu to offer different issues and there are some local menus that you wouldn't even admire in other nations because they're so different however they cater to the native inhabitants. Then we're going to discuss this a bit bit, too. however the fragmented factor of the market is in fact appealing.

most likely there are tons of of eating places that present pizza. might be in any given metropolitan enviornment there's country wide gamers, however there's loads of mom-and-pop and small individual eating places. That fragmentation it's first rate information for a huge enterprise, a dominant enterprise like Domino's because it permits it to benefit market share from these smaller areas. Then also profit market share from probably the No. 2 participant if it could possibly do that by means of consolidating it's obtained economies of scale that some of those smaller agencies cannot compete with. this is spotlight I see on this slide. Do you have got any takeaways on this one, Parkev?

Parkev Tatevosian: Yeah, Demitri, you coated this relatively smartly, however one element i'll add is the fragmented versus now not fragmented goes to play a bigger part on account of the pandemic. As that you would be able to imagine, one of the crucial smaller mother-and-pop class restaurants had a more difficult time enduring the difficulties of the pandemic so a few of them may have closed. That actually gave Domino's and chance to take some share from the smaller operators accessible.

Kalogeropoulos: Yeah, brilliant aspect.