Big Cheese

This is a partial transcript from "Your World with Neil Cavuto," July 13, 2004, that was edited for clarity.

NEIL CAVUTO, HOST: Domino’s, the pizza chain, is offering investors a chance to buy a slice of the company. Domino’s is going public with about 9.5 million shares at $14 a pop. That’s about the price of a large pie and a couple of toppings. But it looks like investors weren’t biting. The stock slipping four percent during its first day of trade.

So is it a bad time for a pizza chain to go public, given the low-carb craze? Let us ask the very thin — and I don’t know how he does it — very thin and fit Dave Brandon, the chairman and the CEO of Domino’s.

David, good to have you.

DAVID BRANDON, CHMN. & CEO, DOMINO’S PIZZA (DPZ): Hi, Neil. It’s great to be here.

CAVUTO: We mentioned the lackluster response to the offering Tuesday. What happened?

BRANDON: We believe going into today, that it’s a fairly soft market. A lot of the weaker IPOs have been polled over the last few weeks.

CAVUTO: Why didn’t you pull this one?

BRANDON: A choppy market. Well, you know, we’re one of the world’s great brands. It’s a 44-year-old company. Under my leadership, and under the ownership of Bain Capital, we’ve put some really positive results on the board over the last five-and-a-half years, and we just made up our mind early this year that it was time to access the public marketplace.

And we really didn’t take it from the standpoint of being a window kind of a move for us. We weren’t trying to pick a window. We decided now was the time, and we put our road show together. We got a lot of interest, and we think we were priced fairly based on where are comps are.

CAVUTO: Yes. I guess the buzz started disappointing on when you priced lower than what they thought the range would be. And then they raised the fact that, you know, you have thousands of outlets everywhere and that you are too big already on that expansion, possibilities were limited.

BRANDON: Well, we really set that range a couple of months ago. And clearly, the market is a bit softer. When we really look at kind our space, we are comping very favorably with McDonald’s and Yum! and Wendy’s, the kind of companies that we think we ought to be...

(CROSSTALK)

CAVUTO: Yes, but in the beginning of the year, when you first came out, there was a lot of buzz, the restaurant index, that had soared, what, about 20 percent? It gave back in the last just few weeks.

BRANDON: Right.

CAVUTO: You know, about 4 or 5 percent. What happened?

BRANDON: That created some price sensitivity, no question about it. I think there have been some commodity increases. I think there’s more and more speculation. I’ve been listening over the last few minutes. Just there’s a lot of kind of apathy in the market right now, and...

CAVUTO: So you don’t think it’s like a super-crowded field? That is another thing you hear, that, you know, you and a ton of others are still pushing the same stuff.

BRANDON: No. We’re in a position where we’ve got an international business. We’re in over 40 countries around the globe, we’ve got thousands of stores to build in those countries. Big upside.

We’ve still got hundreds of stores to build here in the U.S. We’re the world’s largest pizza delivery company. Our market share in the U.S. is still at 20 percent. So there are significant opportunities for us to continue to grow.

CAVUTO: What about all these low-carb diets, the Atkins, South Beach, et cetera? Do they hurt you?

BRANDON: I don’t think so.

CAVUTO: Yes.

BRANDON: We actually believe that the nature kind of our product, it’s very flexible. The consumer can call tonight and make that pizza product as healthy or as unhealthy as they want it to be based on personal choice.

So, rather than a lot of other concepts, who offer something that is inherently healthy, if you want to order a Domino’s Pizza in a hand-crossed — hand-tossed crust with light cheese an all vegetables, you’re going to have a really healthy meal. It’s really your choice.

CAVUTO: And that is what you are doing, right?

BRANDON: Absolutely. I eat a lot of Domino’s Pizza.

CAVUTO: I find that hard to believe! But all right. I’m waiting for you to gain a lot of weight. When you do, come back. All right?

BRANDON: It’s a deal.

CAVUTO: David Brandon, the chairman and CEO of Domino’s Pizza.

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