Domino’s chief financial officer, Jeff Lawrence, announced that he will be retiring from the Ann Arbor, Mich.-based pizza chain at the end of 2020 during the company’s earnings call on Thursday morning, which detailed the results of what has been the strongest quarter for Domino’s same-store sales in nine years, despite the ongoing challenges of the coronavirus pandemic.
“After more than 20 years at the company, including five as CFO, I have decided to retire from Domino's,” Lawrence said during the earnings call. “Domino's is about opportunity and in the past 20 years I've had the chance to learn and lead at one of the best companies in the entire world. […] I could not have asked for more and I'm proud of the results we have achieved together.”
Lawrence said that he will remain on through the end of the fiscal year and will aid in finding a successor for the CFO position.
The announcement follows a particularly strong quarter from Domino’s, with same-store sales up 16.1% for U.S. stores and up 1.3% for international stores. Global retail sales growth increased 5.7% systemwide, impacted by the U.S. same-store sales growth, but were negatively impacted by temporary store closures, particularly in international markets.
The soaring performance was notably tied to the increase in digital and delivery orders, which were boosted by the unusual circumstances of the pandemic, further cementing delivery leaders as the restaurant industry “winners” over the past several months.
Internationally, recovery has been more sluggish, to which Domino’s attributes the pattern of temporary store closures and a limited service structure.
“We believe value and convenience are bringing customers to us and we hope it will continue to bring them back,” CEO Ritch Allison said during Thursday’s earnings call. “Nearly 75% of our sales in the US are coming through digital channels through the second quarter. This combined with loyalty adoption give us a good proven change chance at driving additional customer frequency. I am glad more than ever that we have this direct digital and loyalty relationship with our customers and we are not dependent on third party to bring us orders.”
In addition to focusing on driving digital innovation and customer experience, Allison said a key aspect of their strategy at this time is menu innovation. He mentioned that the company just began rolling out a new improved version of their chicken wings based on customer requests, adding that the formula for their wings “needed to improve.”
“Menu innovation doesn't always have to be something brand-new but can't can a major renovation of existing products that customers have simply told us need to be better,” Allison said. “[…] Our strategy in launching new products focuses on first driving incremental sales and orders and incremental profitability through our franchisees and store level. We focus on permanent menu items and simple operations.”
As the pandemic and economic recession continues, Allison added that now more than ever, everyday value will be an important part of their platform, along with the continuation of fortressing and unit growth.
Revenues for the quarter increased 13.4% to $920 million in the second quarter of 2020 up from $811.7 million in the same period a year ago, driven by higher global retail sales resulting from U.S. same store sales growth and an increase in U.S. store counts during the trailing four quarters.
Net income increased 22.4% to $118.7 million, or $2.99 per share, up from $92.4 million, or $2.19 per share in the same quarter a year earlier.
Domino’s opened 84 net new stores systemwide, including 39 new U.S. stores during the second quarter of 2020.
As of June 14, Domino’s has 17,173 stores globally.
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