Domino's Delivery Partnerships and Loyalty Revamp Point Toward Durable Medium-Term Outperformance

With an 85% digital sales mix, a strong loyalty program, and a quickly growing carryout business, Domino's looks well positioned to navigate a turbulent industry environment. By our math, the firm has taken 210 basis points of market share in the quick-service restaurant, or QSR, pizza category since 2018, seeing its share of global sales swell to 20.2% in 2023, according to Euromonitor data and our calculations. While we expect a challenging 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, strengthening its tech infrastructure, and building store density at the market level (fortressing) as prudent.