Domino’s Pizza (DPZ) Q2 2017

J. Patrick Doyle – Domino’s Pizza, Inc.

Pizza business growing faster outside the US

“…international markets in general are actually less competitive in pizza than our domestic market on average. There are certainly exceptions to that, but the category is growing faster outside of the U.S. than inside the U.S. The competitive set is generally less restricted and 95% of the people in the world live outside of the U.S. and the pizza category is probably a little over double the size internationally what it is in the U.S. So clearly far less-developed, less competition, more opportunity to grow.”

Small players have a scale advantage

“The broad story remains the same that it has been domestically, which is larger players taking share from smaller players. And certainly we’ve been doing better than the rest of the large players over the course of last few years. But I still believe that the longer-term story is the competitive advantage that scale brings to the larger players versus the smaller players.”

Wage pressure won´t be passed on to customers in higher prices in the short term

“There is pressure out there on wages in general as the labor market continues to strengthen and that’s a really high-class problem. When strength in the labor market is putting pressure on rates that’s the way you want to see it working and we are always going to be conservative about reacting to that with pricing to our customers….We pay what we need to pay to keep our stores staffed and give our customers great service….It may have some effect on margins and then we kind of fine-tune pricing where we can but we want to be conservative around that