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Blog
Domino’s Uh-oh
July 26, 2006
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David Farkas
You’ve got to admire Domino’s Pizza CEO David Brandon. After same-store sales skidded for the second quarter in a row, a relative rarity at the giant pizza-delivery chain, the ex-University of Michigan footballer did a rare thing: He shouldered the blame.
“We see [the declines] as our responsibility,” he said flatly during a 20-minute Webcast with restaurant analysts on July 20. Like some other chain CEOs, he wasn’t claiming high energy prices or adjustable rate mortgages--now, the proverbial “macro” pressures--were to blame for the 4.9 percent deficit in Q2.
He simply blamed a lack of performance, confessing that promotions during the first six months hadn’t worked. He didn’t have much choice, really. While comp sales at rival Pizza Hut are flat, Papa John’s has had a bullish second quarter, reporting a same-store-sales gain of 4.9 percent in June.
Brandon acknowledged as much: “Congratulations to Papa John’s. They don’t seem to worry much about the economic conditions. They are doing just fine.”
In fact, a share of Papa John’s was trading hands at $32.65 as Brandon was speaking. Domino’s, meanwhile, was down $2, to $22 a share.Posted by David Farkas on July 26, 2006 | Comments (0)