ANN ARBOR, MICH. — Domino’s Pizza, Inc., through a partnership with Microsoft, wants to make it easier for consumers to order and, through the pizza chain’s reward program, to make it easier to earn free food.
Executives gave details in an Oct. 12 earnings call covering financial results for the third quarter ended Sept. 10. Same-store sales in the quarter declined 0.6% in the United States and, excluding foreign currency impact, increased 3.3% internationally.
Ann Arbor-based Domino’s on Oct. 3 announced it had joined with Microsoft, Redmond, Wash., to use artificial intelligence (AI) technology and cloud computing power to improve ordering and store operations. The companies will leverage the Microsoft Cloud and Azure OpenAI Service.
“Together, our teams are focused on two important goals: first, transforming customer experiences by enhancing the ordering process through personalization and simplification; and then second, streamlining operations and quality control with more predictive tools,” said Russell J. Weiner, chief executive officer of Domino’s, on Oct. 12.
The technology will help store managers save time on tasks such as inventory management, ingredient ordering and staff scheduling, according to Domino’s, which expects to begin piloting generative AI-powered systems to stores and customers within six months.
In its rewards program, Domino’s has lowered the threshold to earn points to $5 from $10, which should make the chain more competitive in the carryout segment where tickets tend to be lower, Mr. Weiner said.
In the past consumers needed to order six times to get a free pizza. Sandwiches, pastas and lava cakes have joined the pizza level, and consumers will need fewer orders to earn free bread twists and stuffed cheesy bread, single-serve beverages, Parmesan bread bites and dipping cups.
“Now you can buy as little as two times to get free items, and what that does is it really plays with frequency of lighter users,” Mr. Weiner said.
He added Uber Eats should be providing delivery orders from all US stores by the end of the year.
“We expect this initiative will drive incremental delivery volume from new customers, increase our share of the pizza delivery market and create stronger economics for our company and franchisees,” he said. “This will begin in a measurable way in the first quarter of 2024.”
Net income in the current year’s third quarter was $148 million, or $4.18 per share on the common stock, which was up 47% from $101 million, or $2.79 per share, in the previous year’s third quarter. The main reason for the increase was a $28.2 million pre-tax unrealized gain associated with the remeasurement of the company’s investment in DPC Dash Ltd. Third-quarter revenues fell 3.9% to $1.03 billion from $1.07 billion primarily due to lower supply chain revenues and lower US company-owned store revenues.
Global net stores declined by eight stores, which included the closing of the remaining 143 Domino’s stores in Russia. The master franchisee that owned the Russian stores intends to file for bankruptcy. Domino’s expects its 2023 global net store growth to trend at or slightly below its two- to three-year outlook of 5% to 7%.
Over the first nine months of the fiscal year, Domino’s had net income of $362 million, or $10.19 per share on the common stock, which was up 23% from $294 million, or $8.11 per share, in the same time of the previous year. Revenues fell 2.2% to $3.08 billion from $3.14 billion.