World leader in pizza delivery, Domino's Pizza, Inc. (DPZ) recently announced the opening of a store in Asuncion, Paraguay in collaboration with its franchisee, Grupo Vierci. This store marks the entry of Domino's Pizza in Paraguay.
Domino's Pizza intends to capitalize on Grupo Vierci’s extensive knowledge of the local market to expand its offerings in the region. The company intends to have three stores active by the end of May 2014. We believe that expanding its footprint in this market would be profitable as Asuncion currently has limited pizza delivery options.
Since Domino’s earns the majority of its revenues from outside the U.S., it is committed to accelerate its presence in high-growth international markets. Currently, Domino’s has established its presence in 70 countries worldwide.
Moreover, the company is concentrating and investing heavily on technology-driven initiatives like digital ordering. Domino’s has been regularly launching new apps to boost its digital ordering platform. In 2013, Domino's generated approximately 40% of sales in the U.S. from its digital channels, thanks to the introduction of ordering apps. Domino's ordering apps now cover approximately 95% of the U.S. smartphone market.
However, like other food chains, this Zacks Rank #3 (Hold) company is also facing troubles due to a weak consumer spending environment owing to macroeconomic pressure. Moreover, food cost inflation remains a concern.
Some better-ranked stocks in the restaurants industry include Famous Dave's of America Inc. (DAVE), The Wendy's Company (WEN) and Brinker International, Inc. (EAT). While Famous Dave's of America and The Wendy's sport a Zacks Rank #1 (Strong Buy), Brinker International holds a Zacks Rank #2 (Buy).