Domino’s shares fall after CEO announces he’s leaving
Investors are going to miss Domino’s Pizza Inc. Chief Executive Officer Patrick Doyle.
Shares of the pizza delivery chain slid on the news that Doyle, who oversaw a rapid sales expansion at the chain during the past eight years, will hand the reins to one of his top lieutenants this summer.
Doyle is credited with mounting a turnaround at Domino’s, focusing on digital ordering as technology has become key to lock in customers in the restaurant industry. Richard Allison, 50, who heads the international division, will become CEO on July 1, the company said late Tuesday. It’s also promoting domestic president, Russell Weiner, to the newly created role of chief operating officer.
The shares declined as much as 5.1 percent to $196.18 on Wednesday, the biggest intraday drop in almost three months. The stock had been up 9.4 percent this year through Tuesday’s close.
Under Doyle, the Ann Arbor-based company has outperformed most of its restaurant peers in same-store sales, helping send the stock up every year since Doyle took the helm.
“His shoes will no doubt be difficult to fill,” Mark Kalinowski, an analyst at Nomura’s Instinet, wrote in a research note, adding that the promotions for Allison and Weiner were a “best-case succession plan.”
Doyle, 54, said he set three goals for himself when he became CEO in 2010: making Domino’s the No. 1 pizza company, boosting the return on investment for franchisees, and putting a leadership team in place.
“We’ve accomplished all of those goals, and I will leave Domino’s knowing that it is in great hands,” he said in a statement.
Still, the change brings more uncertainty to a pizza industry bracing for a slowdown. Papa John’s International Inc., Domino’s smaller rival, also is changing its CEO. Founder John Schnatter abruptly announced plans last month to step down, passing the job to Chief Operating Officer Steve Ritchie.
Allison, who goes by “Ritch,” joined Domino’s in 2011 after working at consulting firm Bain & Co., where he helped run the restaurant practice.
“We’re looking to continue accelerating our growth with the support of our tremendous franchisees, managers and team members the world over,” Allison said. “We want to become the dominant player in pizza everywhere in the world.”