Chipotle Mexican Grill (CMG) is aggressively increasing unit count to lever its successful fast-casual concept in the US. Shake Shack (SHAK), which recently went public, also stated that unit growth will be a catalyst to its revenue in the coming years. To learn more, read What Investors Should Know About Shake Shack’s IPO. Companies such as Domino’s Pizza (DPZ), Yum! Brands (YUM), and McDonald’s (MCD) are looking outside the US to grow their revenues.
In the above chart we see that Domino’s added more units internationally last quarter. The company added a total of 662 units in the last 12 months and 297 units in the fourth quarter alone. In the previous quarter, much of the international store growth was in countries like India, Japan, the UK, and Turkey. The company also opened in new markets like Norway.
Growth in domestic market
In the domestic market, the company added a total of 94 franchise stores over the past 12 months and 51 in the fourth quarter alone, and the company closed 26 stores over the year.
Besides opening new stores, Domino’s, like Burger King (BKW) and McDonald’s (MCD), is also re-imaging its stores. Management stated in the previous quarter that it has re-imaged over 10% of its stores in the US. Re-imaging can help increase traffic and is a positive for restaurant stocks such as those found in the Consumer Discretionary Select Sector SPDR Fund (XLY). XLY holds 4% of MCD and 3% of Starbucks (SBUX).