It wasn't that long ago that Domino's Pizza (DPZ) - Get Domino's Pizza, Inc. Report was a second-rate delivery chain, lagging behind competitors Papa John's (PZZA) - Get Papa John's International, Inc. Report and Pizza Hut (which is owned by Yum! Brands (YUM) - Get Yum! Brands, Inc. (YUM) Report ).
But somehow, in the last 10 years, the company has driven a turnaround in both its image and its stock. Won over by a reworking of the company's stale pizza recipe, customers started ordering up. And since 2010, shares of Domino's have soared by more than 400%, putting plenty of dough in its investors' pockets.
Most recently, the company has proven itself immune to a restaurant recession that has seen a reduction in sales at rivals McDonald's (MCD) - Get McDonald's Corporation (MCD) Report and Restaurant Brands International (QSR) - Get Restaurant Brands International Inc Report . During the fourth quarter of fiscal 2016, Domino's recorded a 10% year-over-year rise in revenue, a 16% year-over-year increase in net income, and 14% year-over-year sales growth in the U.S.
Year-to-date, Domino's stock is up by more than 15.6%. Compare that to McDonald's, which has risen by less than 6%, or even Papa John's, which has fallen by nearly 7%.
But there's still plenty of room for growth in Domino's, especially as this once-Podunk pizza chain goes science-fiction.
On Wednesday, Domino's announced that it would start testing out delivery by robot. In a partnership with Starship Technologies, a startup begun by the founders of Microsoft's (MSFT) - Get Microsoft Corporation (MSFT) Report Skype, Domino's will use delivery robots to bring pizza to customers' doorsteps in select German and Dutch cities.
The bots travel at a top speed of roughly 3.73 miles per hour, and it will take about 15 to 30 minutes for orders to be fulfilled from the moment of ordering.
Starship already has delivery bots in action in both Europe and the U.S. And, the robot company has a partnership in place with Daimler (DDAIF) .
But what's really intriguing is that Domino's has big plans in the autonomous delivery space. Not only is it experimenting with earth-bound robots, but the company is also developing a robotics division that will also oversee projects to deliver pizza by drone.
"We are a global company, and we are eager to progress innovative technology in all of the countries in which we operate - we are very excited to be partnering with Starship as it brings regular deliveries by robot one step closer to commercial operations," said Domino's group CEO and managing director, Don Meij. "With our growth plans over the next five to 10 years, we simply won't have enough delivery drivers if we do not look to add to our fleet through initiatives such as this."
Investors should continue to keep an eye on Domino's as the pizza maker continues to dish out more surprises.
The author is an independent contributor who at the time of publication owned none of the stocks mentioned.
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