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Pizza: If It’s Delicious, Will They Come?

The company has worked tirelessly to improve the taste of its pizza. But with the economy facing so many headwinds, will consumers lose their appetite for Domino's?

That's perhaps the most serious question facing investors who either want or must put money to work in the restaurant space.

"In an environment where everybody's fretting about higher gas prices and higher payroll taxes and the crushing of the American consumer, you might very well have looked at that big-picture thesis and decided all of our quick serve restaurant plays are in trouble," said Jim Cramer.


However, results suggest that kind of blanket conclusion is misguided – at least in the case of Domino's.

"The company delivered a knock-out quarter," said the Mad Money host. And part of the strength came from the company's delicious new products.

Not too long ago Domino's was thought to be synonymous with pizza that tasted like cardboard but not anymore. The company has embarked on an aggressive campaign in which it has introduced delicious new recipes.


Domino's Pizza
Daniel Acker | Bloomberg | Getty Images
Domino's Pizza

And from the looks of the latest results, their efforts paid off.

Domino's new pan pizzas helped lift its profit in the fourth quarter by 22 percent. CEO Patrick Doyle told Mad Money pan pizza sales exceeded the company's expectations. Customers who were getting pan pizzas from competitors (such as Pizza Hit which is owned by Yum! Brands) started "giving us some of their business," he said.

In fact, Domino's pizza has become so delicious that people are buying more. During the quarter, Domino's said sales at locations open at least a year rose 4.7 percent domestically.

It seems great taste may even trump the squabbling in Washington.


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Doyle also said that Domino's wasn't seeing an impact from "anything that's happening with the government." These comments come in contrast to other restaurant companies, such as Olive Garden parent company Darden Restaurants Inc., that have said higher payroll taxes were taking a toll on sales.

All told, Jim Cramer thinks Dominos illustrates an important idea for investors.

"You're always better off investing based on what's actually happening at an individual company. That's the case with Domino's."


Call Cramer: 1-800-743-CNBC

Questions for Cramer? madmoney@cnbc.com

Questions, comments, suggestions for the "Mad Money" website? madcap@cnbc.com

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