REVENUE COURSE

Domino's Pizza - Revenue and Performance Analysis



Domino's Pizza - Revenue and Performance Analysis

Introduction

Revenue and performance management is important so that company cannot experience any loss and indentify an area where the company is lacking their performances. The analysis of revenue and performance can highlights and overcome the problems the company is facing; these problems might be small and cannot easily be seen by the officers. Through this, the small areas are highlight and improvement in that area can leads the company to more efficient productivity. This paper focus on the Domino's Pizza - Revenue and Performance Analysis which will demonstrate a comprehensive understanding of the global economic environment through financial analysis trends business is experiencing.

Discussion

Overview of the Company

Domino's Pizza is the international restaurant chain fast food, the second-largest pizza restaurant chain after the “Pizza Hut” in the United States. Domino's Pizza has about 9700 corporate and authorized branches in 70 countries under the license of franchising. The company was founded in 1960 and is headquartered in Ann Arbor in the state of Michigan. The primary product offered by Domino's Pizza is pizza, but they also offer other dishes, appetizers and desserts. Their business activity covers the delivery of orders to customers. In 2012, Domino's Pizza chain had more than 9,000 food and beverage facilities, including over 3,000 outside the United States. The company is listed on the NYSE (symbol shares: DPZ) (Adkins T., Bailey V et al., 2010, pp. 25-30).

Financial Performance

Main revenue streams and profit streams of Domino's Pizza

The main revenue generated by Domino's Pizza is through the Royalties and sales to franchisees, Rental income on leasehold and freehold property and Finance lease income. The company has divided their business in the following manner through the revenue is also divided. Domino's Pizza sells around Over 9,500 Units Worldwide. The breakup has been given below (Domino's Pizza Franchising, 2012).

Over 9,500 Units Worldwide

 

 

Domestic Market

International Market

Global Retail Sales are of 50%

Global Retail Sales are of 50%

 

 

 

 

 

 

Franchised Stores - 4,496

Franchised Stores- 4,650

Company Owned Stores - 395

Non of Company Owned Stores

Company Owned Supply Chain Facilities - 19 Company Owned Supply Chain Facilities - 6

Domestic Market

 

 

International Market

 

Total Units 9541

 

 

LTM Retail Sales- Global 6.8 billion dollars

 

Franchise

96%

Franchise

95%

Company-Owned

4%

 

Company-Owned

5%

International

49%

 

International

50%

Domestic Market

51%

 

Domestic Market

50%

Royalties and sales to franchisees

Dominos main source of revenue is Royalties and sales to franchisees. This can be seen from the above table which has been taken from the annual report 2011. Dominos in 2011 generated around £196,135,000 where it was £175,280,000 in 2010. Dominos has been earning a huge portion of their revenue through selling trade mark and hence Domino's continues to be a pioneer in the pizza industry. Through franchising they test new products and promotions, and deliver successful solutions. The reason for high revenue from this portion is due to their model. They have strong economy and low cost for the opening of branches. This assists to generate strong annual rates of return. They have major territories to buy or build a ...