Is Domino's Doing Enough to Counter Inflation?
Domino's Pizza (NYSE: DPZ) is scheduled to report fiscal second-quarter 2022 earnings on July 21. The international pizza company is grappling with rising inflation and labor shortages, as the economic reopening is taking the wind out of its sails.
Domino's thrived in the early stages of the pandemic, when most governments prohibited dining at restaurants. Now that business restrictions have eased and folks have more choices on what to eat, Domino's sales growth is decelerating.
In its most recent quarter, which ended on March 27, Domino's overall revenue increased by 2.8%. Note that Domino's runs on a franchise model, where most of its restaurants are run by franchisees. Domino's earns revenue by taking a percentage of sales as a royalty. Additionally, Domino's earns revenue by selling franchisees the raw materials they need to make pizza, breadsticks, and chicken wings. Interestingly, Domino's increased the prices on those goods sold to franchisees by 11.9% in the quarter that ended in March.
Source Fool.com
