Domino’s Pizza Wants to Be More Than Just a Pizza Chain

Domino's new Specialty Chicken proves that the pizza chain wants to be known for more than just its pizza.

Apr 20, 2014 at 10:08AM

It seems the motto lately for many fast-food chains is "innovate or die." The latest chain to innovate is Domino's Pizza (NYSE:DPZ) with a new menu item called Specialty Chicken. This looks to be a good move for Domino's, as boneless chicken has been one of the fastest-growing menu items in the restaurant industry.

This move by Domino's certainly won't go unnoticed. Papa John's International (NASDAQ:PZZA) and Yum! Brands (NYSE:YUM), which owns both Pizza Hut and KFC, will certainly be observing how well Specialty Chicken goes over with Domino's customers.

De

What is Specialty Chicken?
Domino's originally wanted to call its new menu item pizza chicken. The problem was that when the company tested the name, participants didn't know what the company meant by pizza chicken. To eliminate any confusion, the company decided to call it Specialty Chicken.

Specialty Chicken is unique in that instead of pizza dough, Domino's layers a combination of different toppings, sauces, and cheeses over 12 bites of lightly breaded whole-breast, white-meat chicken. The four varieties are Crispy Bacon & Tomato, Spicy Jalapeno-Pineapple, Classic Hot Buffalo, and Sweet BBQ Bacon.

Domino's will sell Specialty Chicken as part of its "[two] or more mix and match value menu for $5.99." To boost awareness, the chain is launching a national ad campaign on April 21. Domino's will also be giving away 25,000 orders of Specialty Chicken on its Facebook page.

Dominos Pizza Introduces Specialty Chicken

An expanded menu is working
Besides Specialty Chicken, the expanded menu now includes sandwiches, pastas, stuffed cheesy breads, chicken wings, and chocolate lava crunch cake. The plan has been working, as U.S. same-store sales rose 5.4% in 2013. International same-store sales grew even faster and were up 6.2% for the full year. For Domino's, 2013 marked the 20th consecutive year of international same-store sales growth.

Same-stores sales are one of the best ways to determine how well a restaurant chain is doing. It measures how well locations that have been open one year or more are performing. It's also an easy way to see how a restaurant is faring against the competition. 

What's Papa John's up to?
Papa John's has been adding items to its menu as well. However, Papa John's focus has been on adding more inventive pizzas to its menu. In particular, Papa John's has been focused on limited-time offers for its specialty pizzas to boost sales. 

Last year, Papa John's specialty pizzas included the Buffalo Chicken Pizza, which won the Nation's Restaurant News MenuMasters Award for best limited-time offer pizza, and the Chipotle Chicken & Bacon Pizza. The latest specialty pizza from Papa John's is the Double Cheeseburger Pizza for $12.

The latest results prove that its strategy is working. In the fourth quarter, systemwide comparable sales rose 9% in North America and 7% internationally. For the full year, sales rose 4% in North America and 7.5% internationally. This year, Papa John's expects North American systemwide comparable sales to grow 2.5% to 4%. International growth is expected at between 5% and 7%. Papa John's expects to open 220 to 250 new restaurants this year, 70% of which will be in international markets.

How about Yum! Brands?
Pizza Hut is looking to be more than just a pizza chain now that it has rolled out its WingStreet concept to all its U.S. restaurants. In a press release, the company said: "[A] whole new chicken kitchen is available at Pizza Hut." Customers can get an order of eight WingStreet wings with their choice of sauce for $5 and have it delivered as well. The sauce flavors include Buffalo Mild, Buffalo Medium, Buffalo Burnin' Hot, Spicy Asian, Spicy BBQ, Lemon Pepper, and Garlic Parmesan. The wings come either Traditional, Bone-Out, or Crispy Bone-In.

In the U.S., Pizza Hut and KFC are lagging the company's Taco Bell chain. U.S. same-store sales for all of Yum! Brands came in flat for 2013, lead by a 3% rise at Taco Bell; that was offset by a decline of 2% at both Pizza Hut and KFC. The fourth quarter was even worse, with declines of 4% at Pizza Hut and 5% at KFC. Taco Bell managed to post an increase of only 1% in the fourth quarter. Yum! Brands is hoping that WingStreet will be able to turn around sales at Pizza Hut.

 

Forward P/E

Dividend Yield

Domino's Pizza

22.75

1.40%

Papa John's International

23.63

1.00%

Yum! Brands

18.01

2.00%

Source: Yahoo! Finance

Foolish assessment
I think Domino's Pizza is making the right moves by becoming much more than just a pizza chain. Today, customers have many choices when it comes to their dining options. By offering more than just pizza, Domino's is offering a little bit for everyone, and it's hard to go wrong with boneless chicken. I think Specialty Chicken will be a success that will help grow same-store sales and boost Domino's share price.

3 stocks to heat up your portfolio
The one sure way to get wealthy is to invest in a groundbreaking company that goes on to dominate a multibillion-dollar industry. I don't know if Donino's Specialty Chicken could be considered ground breaking, but I do know our analysts have found multi-bagger stocks time and again. And now they think they've done it again with three stock picks that they believe could generate the same type of phenomenal returns. They've revealed these picks in a new free report that you can download instantly by clicking here now.

Mark Yagalla has no position in any stocks mentioned. The Motley Fool owns shares of Papa John's International. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of fool.com.

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to www.fool.com/beginners, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at www.fool.com/podcasts.

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.


Compare Brokers