Domino's (DPZ) Boosts AI Capabilities With Microsoft Partnership
Domino's Pizza, Inc. DPZ recently announced a collaboration with Microsoft Corporation MSFT to generate AI solutions. The initiative will likely enhance the pizza ordering process and simplify store logistics. The company intends to pilot the AI-powered solutions within the next six months.
Per the agreement, Domino's and Microsoft will establish an Innovation Lab, pairing both companies' executives with engineers to accelerate the time-to-market for smart store and ordering solutions. The company will leverage the Microsoft Cloud and Azure OpenAI Service to boost loyalty and engagement for customers, franchisees and employees.
Meanwhile, the company stated that it has progressed in modernizing store systems and is in the early stages of developing an Azure OpenAI Service-powered generative AI assistant. The solution is meant to assist store managers with daily activities like staff scheduling, ingredient ordering, and inventory management. Also, it emphasized streamlining pizza preparation and quality controls with more predictive tools.
As consumer preferences rapidly evolve, generative AI has become a game-changer for fulfilling new needs and improving the customer experience. Nevertheless, the company is optimistic concerning the strategic partnership and anticipates the initiative to drive growth in the upcoming periods.
Emphasis on Digital initiatives
Domino’s invests heavily in technology-driven initiatives like digital ordering to boost sales. The company continues to innovate across all aspects of its business — including GPS, e-bikes, AI in-store technology, great food and an evolving digital experience.
In June 2023, the company rolled out a new Pinpoint Delivery service in the U.S. market. The concept is based on providing food deliveries to locations based on PIN and without a standard address.
During the first quarter of fiscal 2023, the company initiated the rollout of electric vehicles for pizza delivery. Apart from this, enhanced make-line and cut-table technology and AI-enabled forecasting are being rolled out to better match demand with capacity. The initiatives will likely enhance the speed, accuracy and efficiency of services in the future.
In the past year, shares of the company have gained 10.2% compared with the industry’s 4.2% growth.
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Zacks Rank & Key Picks
Domino’s currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Zacks Retail-Wholesale sector include:
Arcos Dorados Holdings Inc. ARCO sports a Zacks Rank #1 (Strong Buy). It has a trailing four-quarter earnings surprise of 35%, on average. The stock has gained 14% in the past year. You can see the complete list of today’s Zacks Rank #1 stocks here.
The Zacks Consensus Estimate for Arcos Dorados’ 2023 sales and EPS suggests rises of 19.2% and 13%, respectively, from the year-ago period’s levels.
El Pollo Loco Holdings, Inc. LOCO currently carries a Zacks Rank #2 (Buy). It has a trailing four-quarter earnings surprise of 23.7%, on average. Shares of LOCO have dropped 5.6% in the past year.
The Zacks Consensus Estimate for LOCO’s 2024 sales and EPS indicates a 3.5% and an 18.3% growth, respectively, from the year-ago period’s levels.
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