Domino’s Pizza Inc. shares jumped after the company announced a third-party ordering agreement with Uber Technologies Inc.
The deal will allow US diners to order Domino’s through the Uber Eats and Postmates apps, according to a statement Wednesday. Orders placed on the platform will be delivered by uniformed Domino’s drivers.
“Given certain customers only order their delivery from the Uber Eats app, this deal could make Domino’s available to millions of new customers around the world,” Domino’s Chief Executive Officer Russell Weiner said in the statement.
Domino’s shares surged as much as 17% in New York trading, the most since February 2020. It was up 9.8% at 10:07 a.m., the most since October.
The company will do a test in four pilot markets in the fall and is expecting to roll out the service across the country by the end of 2023. Uber Eats will be Domino’s exclusive third-party platform in the US until at least 2024.
Domino’s said the move will help it access new customers, and that it expects “a meaningful amount of incremental delivery orders” once the platform is widely available.
Ann Arbor, Michigan-based Domino’s benefited from elevated consumer demand during the pandemic but has struggled in recent quarters after Americans returned to in-person dining and some lower-income consumers switched to eating at home.
“The partnership will likely boost Domino’s struggling domestic delivery sales and improve franchisee economics,” Peter Saleh, an analyst at BTIG, wrote in a note to clients.
(Updates with shares in fourth paragraph, analyst comment in eighth paragraph.)
Author: Daniela Sirtori-Cortina
