Pizza is a simple meal composed of just a few base ingredients and some toppings. Yet Domino's (NYSE:DPZ) has managed to build a successful restaurant empire on a product that, in theory, could be replicated by any rival that can get its hands on enough dough, cheese, and tomato sauce to challenge the industry leader.

Rather than cede ground to its competitors, though, Domino's has seen its market share soar in the past decade. It accounted for a whopping 30% of the U.S. delivery industry last year -- up from 19% in 2007.

Let's look at the prospects for continued market-thumping growth when the pizza giant reports fourth-quarter earnings on Tuesday, Feb. 20.

Four adults share a delivery pizza.

Image source: Getty Images.

Delivering volume growth

Domino's has been posting tantalizing growth for over a decade now, but things really kicked into high gear in 2015 when comparable-store sales shot into the double digits. The chain then followed that performance with another double-digit expansion in 2016. And through the first nine months of 2017, its results are just as impressive. Comps are up 9.4% in that period, compared to gains of around 2% for both Papa John's and Yum! Brands' Pizza Hut.

The chain's comps have slowed recently, dipping to an 8.4% pace last quarter from 9.5% in the prior quarter. That downtick, if it continues into the fourth quarter, would knock Domino's annual growth back below 10% for the first time in three fiscal years. Yet it would still indicate healthy market share gains against rivals.

Expanding the store base

The chain's delivery focus means that its stores are tiny -- just 1,500 square feet. That makes Domino's locations cheap and easy to launch, which helps explain how the company can ramp up expansion so quickly. It added 217 stores across its global footprint last quarter to bring its year-to-date gains to 1,182. These are almost all franchised locations, and the company benefits from the high-margin royalty fees it charges, along with revenue associated with food, equipment, and supplies sold to the franchisees.

DPZ Operating Margin (TTM) Chart

Data by YCharts.

Domino's needs to open just 129 locations in the fourth quarter to establish a new record for annual store launches. Most of the new shops are likely to be in international markets, especially after last quarter's acceleration in that small (but important) operating segment.

Looking further out

Domino's doesn't issue annual forecasts, but it frequently updates investors on its long-term growth plans. A year ago, for example, CEO Patrick Doyle and his executive team hiked their three to five-year plan following what they called "unprecedented" sales momentum as comps gains topped off at 12%.

Specifically, Domino's believes it can expand comps by between 3% and 6% each year, in both the domestic and international markets. The company is also targeting adding between 6% and 8% per year to its base of restaurants. That outlook represented a modest increase in both domestic comps and the store count.

The chain is likely to come in well ahead of its U.S. growth target for the year while ending up roughly on track in its other big-picture operating goals. Thus, there's a good chance that Domino's continues to boost earnings at a 20% clip (or better), just as it has in each of the last three fiscal years.

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