On yesterday evening's Mad Money, host Jim Cramer interviewed Patrick Doyle, the chief executive officer of Domino's Pizza, Inc. (NYSE: DPZ), following a stellar fourth-quarter for the chain's fiscal 2017 year. The 54-year-old CEO has served since 2010, after first joining Domino's in 1997. Cramer, founder of The Street, called Domino's Pizza among the "best plays on the stay-at-home economy."
The CNBC host explained that Domino's has embraced technology in a manner that allows people to order a pizza to their "couch, without ever having to speak to another human." Cramer noted that Jim Doyle fist came on the program over "seven years ago," when DPZ stock was near $10 per share.
DPZ stock opened at $187.84 this morning, and is up by 483.0 percent over the past 10 years. By comparison, the Dow Jones Industrial Average is up by 60.1 percent over the same period.
Technology investments behind DPZ stock run
Jim Cramer asked CEO Doyle about the growth Domino's has been experiencing in the face of weakness experienced by the employer of 14,100's competitors. Doyle responded that the story is similar to that of other recent successes by Domino's, including "investments" Domino's has made in the company's "food," "technology," and "stores," which are starting to show returns in the chain's "same store sales growth."
Patrick Doyle spoke of the goal of Domino's management to "continually improve the experience" of their customers.
Cramer noted that Domino's listed Apple Inc. (Nasdaq: AAPL), Amazon.com, Inc. (Nasdaq: AMZN), Alphabet Inc. (Nasdaq: GOOG, GOOGL), and Facebook, Inc. (Nasdaq: FB), as partners, and stated that the technology companies are not "traditional restaurant partners."
Eight-hundred Domino's employees in technology positions
Doyle offered that customers can order food from the platforms of each of the Domino's partner companies mentioned, and that management spends time considering the best ways to "reach" their customers.
Partnering with popular websites makes sense for Domino's, because that's where their customers "spend their time." The CEO told the Mad Money host that about half of the staff, or about 800 people, at Domino's Ann Arbor, Michigan headquarters are involved in developing and maintaining the 57-year-old company's technologies.
Four-hundred of Domino's employees are said to be engaged in "data analytics."
Despite the Domino's focus on, and success found with, technological innovation, Patrick Doyle underlined that people continue to return to Domino's because of the hard work and commitment of its franchisees, who are "making great pizzas."
Jim Cramer noted commentary from Papa John's International, Inc. (Nasdaq: PZZA) with regard to an 8 percent drop in sales related to a tumble in National Football League ratings, and asked the CEO if the ratings decline had affected Domino's' sales. Doyle responded that they, clearly, "were not." The CEO continued that the pizza chain "did take share" over recent quarters; he noted that much of Domino's growth has come as a result of taking market share away from smaller chains and independent restaurants, with less coming from bigger competitors.
Sit-down restaurants must provide 'special' experience
Cramer then asked Doyle about his view of why the "stay-at-home economy" has appeared, particularly now that disposal income has increased and the Great Recession is clearly in the rear-view mirror. The CEO explained his view that people "still go out" to eat, but only for "special" occasions. Doyle expressed that unless there is an overwhelmingly desirable experience associated with visiting a retail location that many customers are content to simply order available goods and services from home.
DPZ stock pays annual dividends of $1.84, currently yielding 0.97 percent. Domino's last reported an operating margin of 18.36 percent, and a profit margin of 8.68 percent, at January 1. At the time, the firm held $42.81 million in cash, and owed $2.19 billion in debt.
