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Domino's Pizza Inc

DPZ: XNYS (USA)
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Morningstar Rating for Stocks Fair Value Economic Moat Capital Allocation
$653.00BpstHpfsjgdhwv

Domino's Remains Appropriately Positioned Despite Delivery Pressures Across Restaurant Industry

Business Strategy and Outlook

Industry changes espoused by COVID-19 changed little for digital-leader Domino's, which already profited from a 70% digital sales mix, boasted a robust loyalty program, and maintained proprietary e-commerce and point-of-sale platforms. While the reopening of dine-in options has weighed on recent results, the firm has taken 220 basis points of market share in the quick-service restaurant, or QSR, pizza category since 2019, seeing its share of global sales swell to 20.6% in 2022, according to Euromonitor data and our calculations. While we expect a turbulent couple of quarters, with evidence of consumer trade-down and declining industrywide traffic, we view the firm's long-term emphasis on defending franchisee profits, supporting its growing carryout business, and building store density at the market level (fortressing) as prudent.

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