DPC Dash Announces Key Milestones and Shareholder Update Regarding Domino's Pizza

Rhea-AI Summary

DPC Dash, the exclusive master franchisee for Domino's Pizza in China, Hong Kong, and Macau, reported significant growth in 2024. Key highlights include:

1. Positive net profit after tax in the first half of 2024
2. Store count reached 978 in Q3, aiming to surpass 1,000 by mid-November
3. 29th consecutive quarter of positive same-store sales growth
4. Secured 28 of the top 30 positions for first 30-day sales among Domino's global network
5. Loyalty program membership increased to 21.7 million

Domino's Pizza agreed to allocate 10,000,000 DPC Dash shares (7.66%) to institutional investors, retaining 6.21% ownership. The companies maintain a strong relationship based on their long-term Master Franchise Agreement from June 2017.

Positive

• Reported positive net profit after tax and adjusted net profit after tax for H1 2024
• Store count reached 978 in Q3 2024, with plans to surpass 1,000 by mid-November
• 29th consecutive quarter of positive same-store sales growth
• Secured 28 of the top 30 positions for first 30-day sales among Domino's global network
• Loyalty program membership increased to 21.7 million
• Domino's Pizza 's share allocation expected to enhance trading liquidity and attract long-term investors

Negative

• Domino's Pizza reduced its ownership stake in DPC Dash from 13.87% to 6.21%

Insights

Financial Analyst

DPC Dash's performance in China is impressive, with several key indicators pointing to strong growth and market penetration. The company's 978 store count and plans to exceed 1,000 stores by mid-November show rapid expansion. The 7.66% stake sale by Domino's Pizza is a strategic move that could enhance DPC Dash's liquidity and attract diverse institutional investors.

The 29 consecutive quarters of positive same-store sales growth and securing 28 of the top 30 positions for first 30-day sales globally demonstrate operational excellence and brand strength in the Chinese market. The surge in loyalty program membership to 21.7 million indicates strong customer engagement and potential for sustained growth.

While Domino's Pizza is reducing its stake, the ongoing Master Franchise Agreement ensures a continued strategic partnership. This partial exit by Domino's Pizza could be seen as a vote of confidence in DPC Dash's ability to operate independently while maintaining brand standards.

Market Research Analyst

The Chinese market presents significant growth opportunities for DPC Dash. Achieving profitability in H1 2024 amidst challenging macroeconomic conditions showcases resilience and effective management. The company's success in store openings and sales performance relative to Domino's global network indicates strong market acceptance and potential for further expansion.

The loyalty program's rapid growth to 21.7 million members is a valuable asset, providing data for targeted marketing and personalized offerings. This large customer base could drive repeat business and increase market share in the competitive Chinese food delivery sector.

The share transfer to institutional investors could diversify DPC Dash's shareholder base and potentially improve its corporate governance structure. However, investors should monitor how this change might affect the strategic direction and operational synergies with Domino's Pizza going forward.

HONG KONG, Oct. 17, 2024 /PRNewswire/ -- DPC Dash – Domino's Pizza China ("DPC Dash" or the "Company") (1405.HK), the exclusive master franchisee for Domino's Pizza in the China Mainland, the Hong Kong Special Administrative Region of China, and the Macau Special Administrative Region of China, continues to drive robust growth in the second half of 2024 and provides an update on the shareholder base, involving a subsidiary of Domino's Pizza, Inc. ("Domino's Pizza" or "DPZ") (NYSE: DPZ), the largest pizza company in the world.

DPC Dash reported a positive net profit after tax and adjusted net profit after tax for the first half of 2024, demonstrating effective management strategies amidst challenging macroeconomic conditions. Its store count reached 978 during the third quarter of 2024, with plans to surpass 1,000 by mid-November. The third quarter marked the 29th consecutive quarter of positive same-store sales growth for DPC Dash, underscoring its commitment to quality products and customer satisfaction. DPC Dash has secured 28 of the top 30 positions for first 30-day sales among Domino's global network of over 21,000 stores. This achievement highlights the strength of the Domino's brand and DPC Dash's operational expertise. Furthermore, its total loyalty program membership has surged to 21.7 million, reflecting increased customer engagement through tailored rewards and enhanced experiences.

Domino's Pizza LLC, an indirect wholly-owned subsidiary of Domino's Pizza, has recently agreed to allocate 10,000,000 of DPC Dash's shares, or 7.66% of DPC Dash's total issued share capital as of October 17, 2024, to a group of institutional investors through off-market block trades. Following this share transfer, Domino's Pizza LLC retains 8,101,019 shares accounting for 6.21% of DPC Dash's total issued share capital. Domino's Pizza LLC has committed to a lock-up period of 90 days from the closing date of the share sale for its remaining shares. The enduring relationship between DPC Dash and DPZ remains robust, rooted in their long-term Master Franchise Agreement (MFA) signed in June 2017. This relationship is expected to continue to be a cornerstone of DPC Dash's growth strategy.

"We are thrilled with the performance and growth of the DPC Dash business," said Russell Weiner, Domino's Pizza Chief Executive Officer. "Our equity investment has been and continues to be a strong investment for Domino's, but more importantly, it provided DPC Dash with growth capital when needed and also helped DPC Dash's management team stay focused on driving their business, which they have done incredibly well. With DPC Dash's successful IPO, its nearing the 1,000-store milestone, and its profitability achievements in the first half of 2024, we feel it is the appropriate time to begin partially exiting our equity investment in the business. DPC Dash and the China market continue to be critical to Domino's growth and we look forward to continuing to work with them for years to come."

Aileen Wang, Chief Executive Officer of DPC Dash added, "We are excited about our sustained strong performance and the significant milestones we've reached. Domino's Pizza has been an exceptional organization to work with, and we deeply appreciate its investment, which has laid the groundwork for our growth journey. We view this liquidity event positively, as it will enhance our trading liquidity and attract world-class, long-term investors, thus diversifying our institutional shareholder base. We look forward to continuing our relationship with Domino's Pizza as we further develop this remarkable brand."

About DPC Dash Ltd.

DPC Dash is Domino's Pizza's exclusive master franchisee in the China mainland, the Hong Kong Special Administrative Region of China and the Macau Special Administrative Region of China. Domino's Pizza, Inc., DPC Dash's global franchisor, is one of the most widely-recognized global consumer brands and the world's largest pizza company. Led by a seasoned and visionary management team, DPC Dash is a market leader that differentiates from competitors with, among others, a continually innovated and localized pizza-focused menu, unique expertise and leadership in delivery, technology focus and scalable and replicable store economic model. DPC Dash operates more than 978 stores in 33 cities in China as of September 30, 2024.

For more information, please visit www.dpcdash.com
For official company announcements, please visit www.hkexnews.hk 

About Domino's Pizza^®

Founded in 1960, Domino's Pizza is the largest pizza company in the world, with a significant business in both delivery and carryout pizza. It ranks among the world's top public restaurant brands with a global enterprise of more than 21,000 stores in over 90 markets. Domino's had global retail sales of over $18.9 billion for the trailing four quarters ended September 8, 2024. Its system is comprised of independent franchise owners who accounted for 99% of Domino's stores as of the end of the third quarter of 2024. In the U.S., Domino's generated more than 85% of U.S. retail sales in 2023 via digital channels and has developed several innovative ordering platforms including seven unique ways to order Domino's.

CONTACTS

DPC Dash Ltd Investor Relations:
DPC Dash Ltd
IR@dominos.com.cn 

ICR, LLC
dpcdashIR@icrinc.com 

DPC Dash Ltd Media Relations:
ICR, LLC
dpcdashPR@icrinc.com 

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SOURCE DPC Dash Ltd

FAQ

What is DPC Dash's store count as of Q3 2024?

DPC Dash's store count reached 978 during the third quarter of 2024, with plans to surpass 1,000 by mid-November.

How many consecutive quarters of positive same-store sales growth has DPC Dash (DPZ) achieved?

DPC Dash has achieved 29 consecutive quarters of positive same-store sales growth as of Q3 2024.

What percentage of DPC Dash shares did Domino's Pizza allocate to institutional investors?

Domino's Pizza agreed to allocate 10,000,000 shares, or 7.66% of DPC Dash's total issued share capital, to a group of institutional investors.

How many loyalty program members does DPC Dash have as of October 2024?

DPC Dash's total loyalty program membership has surged to 21.7 million as of October 2024.

When was the Master Franchise Agreement between DPC Dash and Domino's Pizza signed?

The long-term Master Franchise Agreement between DPC Dash and Domino's Pizza was signed in June 2017.