Domino’s Pizza(US:DPZ) Benzinga·2025-09-04 13:21Core Viewpoint - DPC Dash Ltd., the operator of Domino's Pizza in China, reported a 27% revenue increase in the first half of the year, driven by the opening of 190 net new stores, but faces challenges with same-store sales normalization after rapid expansion [2][11]. Group 1: Financial Performance - Revenue rose to 2.59 billion yuan ($361 million) in the first half of the year, up from 2.04 billion yuan a year earlier [11]. - Adjusted net profit increased by 79.6% to 91.4 million yuan from 50.9 million yuan a year earlier [16]. - Same-store sales declined by 1% in the first half of the year, indicating the impact of the "opening hangover" effect [5][4]. Group 2: Expansion Strategy - DPC opened 190 net new stores, bringing the total to 1,198, with a goal of 300 net new stores for the year [11][6]. - The company entered nine new cities, expanding its footprint to 48 cities nationwide [12]. - The average payback period for new stores opened in the first half was just 11 months, significantly lower than the typical three years in mature markets [13]. Group 3: Market Position and Brand Recognition - DPC has become the second-largest pizza chain in China, with significant growth potential compared to industry leader Pizza Hut, which has 3,864 stores [9]. - The company has a growing loyalty program with 30.1 million members, accounting for about 66% of sales [15]. - Older stores in wealthier cities are performing well, reflecting strong brand recognition and resilience in competitive markets [14][7]. Group 4: Market Outlook - The Chinese pizza market is expected to grow at an annual rate of 15.5%, reaching 77.1 billion yuan by 2027 [16]. - DPC's strategy of balancing rapid expansion with sustained profitability positions it well for long-term growth in the expanding pizza market [17].