Dive Brief:

• Domino’s posted a U.S. same-store sales increase of 5.6% and double-digit profit growth during Q1 2024, driven by positive order counts across all income cohorts in both carryout and delivery, CEO Russell Weiner said Monday during the chain’s earning call. 
• Weiner said the company’s Hungry for More strategy, which highlights the company’s food quality, operations, value and franchisees, helped drive additional carryout and delivery sales, as well as rewards program growth. 
• These results mark a significant shift in U.S. sales momentum, which had been plagued by negative delivery comps for several quarters — a streak that was broken in Q4 2023.

Dive Insight:

Domino’s U.S. same-store sales growth was the strongest the company reported since Q1 2021, when the chain increased comp sales by 13.4%. Comps slowed in subsequent quarters, even dropping for two quarters in 2022 as the pandemic environment cooled and inflation grew. Notably, comps were minimally impacted by pricing during Q1, with pricing only up 0.9% during the quarter. 

During the quarter, Domino’s began a series of three product trainings that will focus on dough, how it builds and makes products and how they are cooked as a way to improve operations, Weiner said. The chain rolled out its dough training across all of its domestic locations last quarter, which led to the chain delivering more pizzas than it did all of last year with improved delivery times. 

Domino’s rewards program was one of the biggest drivers of repeat customers. The company revamped it last year, reducing minimum redemption tiers. Active member growth rates were up significantly since it made this change, Weiner said. The biggest percentage came from lapsed and new customers, adding that the chain has seen an increase in carryout customers through its rewards program, which offers a reduced $5 minimum, he said.

“Once customers become members, they’re redeeming more than ever before,” Weiner said. “And increases are being seen across all of our channels, delivery and carryout.” 

Domino’s 20- and 40-point redemption tiers have led to more customer engagement as these tiers now make up a majority of redemptions in the program. Many of its recent promotions, including Emergency Pizza, Carryout Tips and Delivery Tips, are only available to rewards members.

“Emergency Pizza performed better than any Buy One Get One Free I’ve done in my career,” Weiner said. “It was a meaningful driver to our comps in both Q4 ‘23 and in Q1, and it not only drove increased orders, but also the acquisition of members to our loyalty program.”

The rewards program is also driving incremental profitability for franchisees, Weiner said.

“We believe Domino’s Rewards will continue to be a meaningful sales driver for us in 2024,” he said. 

The national roll out of Domino’s Uber Eats partnership, which the company expects will make up 3% of sales for 2024, also drove sales for the quarter. During the quarter, Uber had a 1.4% sales mix, CFO Sandeep Reddy said. The chain is seeing a higher percentage of single-user transactions on Uber compared to its own channel, Weiner said. 

Promotions are another way the chain is driving sales. Domino’s began advertising its newest menu addition, New York Style Pizza ,on Monday, which Weiner said will help attract customers that prefer a thinner crust. The company is also improving its food photography to better showcase its menu items in marketing. In Q1, it brought back its first carryout boost week for the first time since January 2020 and “its performance exceeded our expectations,” Weiner said. The company expects about six boost weeks for the year. 

“These boost weeks are a proven customer acquisition tool that drives both short- and long-term benefits for our brand,” he said.