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What Drove Domino’s and Papa John’s Same-Store Sales in 3Q16?

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Same-store sales growth

SSSG (same-store sales growth), which is expressed as a percentage, is a measure of revenue growth in existing stores over a certain period. SSSG is driven by ticket size and traffic. It’s an important metric for investors to monitor, as it increases a company’s revenue without increasing capital investment, and it’s a direct reflection of how much traffic each location is driving.

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Domino’s Pizza’s 3Q16 performance

Domino’s Pizza (DPZ) posted systemwide SSSG of 9.1%, with domestic company-owned restaurants posting SSSG of 13.8%, and domestic franchised restaurants and international restaurants posting SSSG of 12.9% and 6.6%, respectively. The growth was driven by an enhanced customer experience through the expansion of the company’s ordering platform to Facebook Messenger, menu innovations, marketing, and promotions. The Piece of the Pie loyalty program and the introduction of new salads drove Domino’s 3Q16 SSSG.

Papa John’s 3Q16 performance

Papa John’s (PZZA) posted systemwide SSSG of 6%, with 6.3% growth in domestic company-owned restaurants, 5.1% growth in North American franchised restaurants, and 7.6% growth in international restaurants. The company’s SSSG was driven by the introduction of new menu items, which include it new dessert, Cinnamon Pull-Aparts. The removal of all artificial and synthetic ingredients from its menu items, along with marketing and promotional offers, drove Papa John’s SSSG in 3Q16. After 1.5 years of testing, the company launched its Pan Pizza in October 2016, which is expected to drive Papa John’s SSSG in 4Q16.

During the same quarter, Pizza Hut, operating under the umbrella of Yum! Brands (YUM), posted SSSG of -1%. Next, we’ll look at Domino’s and Papa John’s unit growth.

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