Domino's Pizza Inc.
(
DPZ
), a leading pizza company, has continued to be on a growth
trajectory with the opening of its 10,000th store. The company took
53 years, since it opened its first store in 1960 in Ypsilanti,
Michigan, to achieve this milestone.
The new unit was unveiled in Turkey, in association with its
franchise partner Fides, a private equity company. The franchise
company operates more than 250 stores in Turkey, which is one of
the fastest growing markets for the company.
The company's 10,000th store was opened in Kaligthane, a district
within the city of Istanbul. Istanbul is the largest city in Turkey
and is the country's economic and cultural centre. It is also among
the largest cities in the world by population within city limits.
Istanbul is host to the headquarters of many Turkish companies and
media outlets, and accounts for more than a quarter of the
country's gross domestic product (GDP). Hoping to capitalize on its
revitalization and rapid expansion, Istanbul is currently bidding
for the 2020 Summer Olympics. Thus, the store is expected to
benefit immensely from its strategic location.
This Ann Arbor, Michigan-based company also recently opened its
9999th store in Carlsbad, California. At first, the company had
started to achieve growth through stores in the domestic market.
However, international markets have become its strength for
expansion in the past decade.
The pizza restaurant chain generates more than half of its global
retail sales from international stores, constituting over a third
of its adjusted operating income. It surpassed 5,000 international
Domino's Pizza stores in the recently concluded second-quarter of
2012. Its long-term global retail sales outlook calls for 5-8%
growth.
Following the continued traction in the overseas market, as evident
by the international same-store sales growth of 5.7% as against
1.7% domestic growth in second-quarter 2012, Domino's intends to
further widen its global footprint. Presently, Domino's has its
presence in over 70 international markets of which Australia,
Mexico, India and the United Kingdom are its leading markets. The
company targets to maintain 3-6% growth in international same-store
sales over the long term.
Domino's is not the only quick service restaurant chain to focus on
international expansion. Other restaurateurs,
Yum! Brands Inc.
(
YUM
) and
Papa John's International Inc.
(
PZZA
) are also expanding in the international market.
Domino's currently holds a Zacks #3 Rank, implying a short-term
Hold rating. We also reiterate our long-term Neutral recommendation
on the stock.
DOMINOS PIZZA (DPZ): Free Stock Analysis Report
PAPA JOHNS INTL (PZZA): Free Stock Analysis
Report
YUM! BRANDS INC (YUM): Free Stock Analysis
Report
To read this article on Zacks.com click here.
Zacks Investment
Research