Editors' pick: Originally published March 30.
Domino's Pizza (DPZ) is on track to get even stronger over the next 18 months, as Yum! Brands' (YUM) Pizza Hut contributes to its strength by being a "large share donor," KeyBanc said in a note on Friday.
"Based on recent conversations with several franchisees and operators in the pizza segment, we believe the performance gap seems to have widened among major pizza chains during the [first quarter]," KeyBanc analyst Chris O'Cull said.
O'Cull was not available for further comment.
KeyBanc said while Domino's remains the leader of the pack, Papa John's (PZZA) won't be far behind for long.
According to the firm's research, Papa John's sales improved in March due to "more aggressive promotions than those that occurred earlier in the year." For example, O'Cull said Papa John's launched a promotion of 50% off all pizza ordered online on March 13. The deal lasts for two weeks.
O'Cull expects Papa John's same-store sales to improve 2% to 2.5% in the first quarter.
Still, Domino's growth appears to remain untouchable.
Domino's delivered Wall Street a killer fourth quarter last month due to its unmatched digital ordering offerings which include ordering through Twitter (TWTR) . The pizza king's same-store sales spiked an eye-popping 12.2% as 60% of its total sales were generated from mobile devices.
Early this month, NPD Group reported that the use of mobile apps, text messages and the Internet to order food climbed 18% in 2016, accounting for 1.9 billion food service visits.
Knowing that it had to step up its digital game to compete against Domino's, Papa John's added options in 2016 for customers to buy pizza online with its Papa John's Rewards, gift cards and PayPal (PYPL) , versus just credit cards. As a result, Papa John's fourth quarter same-store sales rose 3.8%, but still missed analysts' estimations for a 5.9% growth, suggesting it's not quite there yet.
Unfortunately for Pizza Hut, the company remains on the tail end of the pizza chain group's success. Pizza Hut saw a 2% decline in same-store sales during the fourth quarter, capping off a year struggles.
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Editors' pick: Originally published March 24.