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DOMINOS PIZZA INC (DPZ) Q4 2025 Earnings Summary

Executive Summary

  • Q4 2025 to-date narrative centers on continued value-led demand, expanded aggregator reach, and brand refresh; formal Q4 financials and call are not yet published. The latest run-rate shows strong Q3 momentum: revenues $1.147B (+6.2% YoY), income from operations +12.2% YoY, while net income/EPS were pressured by DPC Dash mark-to-market and tax rate mix .
  • Management reiterated FY 2025 guide: U.S. same-store sales +3%, international SSS +1–2%, ~8% operating income growth (ex-FX, severance, refranchising) and 175+ net U.S. stores; noted macro softness early in Q4 that could pressure full-year comps, offset by Best Deal Ever, Stuffed Crust, and aggregator build on DoorDash .
  • Strategic catalysts in Q4: brand refresh rollout (“Dommmino’s” crave-mark), new Specialty Pizza (Spicy Chicken Bacon Ranch) priced into Mix & Match, and international DoorDash expansion (Canada), all designed to sustain transaction growth and mix while remaining value-accretive for franchisees .
  • Capital structure de-risked via $1.0B securitization refinancing at ~5.1% blended rate; CFO expects immaterial interest impact in 2025–26; quarterly dividend of $1.74 maintained .
  • Wall Street consensus (S&P Global) for Q4 2025 was not available due to data limits; we anchor context on Q3 trends and Q4 initiatives (see Estimates Context).

What Went Well and What Went Wrong

What Went Well

  • “Hungry for MORE” pillars executed: Best Deal Ever and Parmesan Stuffed Crust drove positive U.S. order counts; both carryout (+8.7%) and delivery (+2.5%) comps were positive in Q3, pacing ahead of QSR pizza category (~1% YTD) .
  • Supply chain margin improved 70 bps YoY on procurement productivity; consolidated income from operations +12.2% YoY, with FX-adjusted +11.8% .
  • Management confidence in multi-year aggregator tailwind: first full quarter fully rolled out on DoorDash; “we deliver one in every three pizzas” off-platform and expect share on aggregators to converge over time .
  • Quote: “We will continue to win and take QSR pizza market share…We have never had more tools to drive long-term value creation for our franchisees and shareholders.” — CEO Russell Weiner .

What Went Wrong

  • Net income and diluted EPS declined YoY in Q3 (NI −5.2%, EPS $4.08 vs $4.19) driven by an unfavorable $29.2M change in DPC Dash investment marks and a higher effective tax rate (22.3% vs 20.4%) .
  • U.S. company-owned store gross margin −50 bps YoY on higher food basket (+3.3%) and wage pressure (partially offset by sales leverage) .
  • Management flagged macro deceleration early in Q4 across restaurants, noting potential pressure on full-year U.S. comps despite initiatives; Street should monitor November–December traffic elasticity to value .

Financial Results

MetricQ4 2024Q2 2025Q3 2025
Total Revenues ($USD Billions)$1.444 $1.145 $1.147
Income from Operations ($USD Millions)$273.7 $225.0 $223.2
Net Income ($USD Millions)$169.4 $131.1 $139.3
Diluted EPS ($USD)$4.89 $3.81 $4.08
Supply Chain Gross Margin (%)11.3% 11.8% 11.3%
U.S. Co.-Owned Store Gross Margin (%)15.5% 15.6% 16.3%

Segment revenue breakdown:

Segment Revenues ($USD Millions)Q4 2024Q2 2025Q3 2025
U.S. Company-owned stores$119.8 $92.5 $82.7
U.S. Franchise royalties & fees$196.0 $156.3 $157.2
Supply chain$876.0 $687.1 $697.0
International franchise royalties & fees$98.4 $77.2 $78.5
U.S. Franchise advertising$153.7 $132.2 $131.6
Total$1,443.9 $1,145.1 $1,147.1

Key KPIs and cost drivers:

KPIQ4 2024Q2 2025Q3 2025
Global retail sales ($USD Millions)$5,939.8 $4,669.8 $4,696.2
Global retail sales growth ex-FX (%)+4.4% +5.6% +6.3%
U.S. same-store sales growth (%)+0.4% +3.4% +5.2%
International SSS ex-FX (%)+2.7% +2.4% +1.7%
Net store growth (Global)364 178 214
Net store growth (U.S./Intl)84 / 280 30 / 148 29 / 185
Food basket pricing change (YoY)+4.4% (Q4’24) +4.8% +3.3%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
U.S. same-store sales growthFY 2025~3% (Q2 call) ~3% reiterated (Q3 call) Maintained
International SSS growthFY 20251–2% (macro/geopolitical caveat) 1–2%, tilting high end if no macro/geopolitical impacts (Q3) Maintained
Operating income growth (ex-FX, severance, refranchising)FY 2025~8% ~8% reiterated (Q3) Maintained
Net U.S. store growthFY 2025175+ 175 net stores (pipeline visibility) Maintained
FX impact on Op IncomeFY 2025~1% headwind at current rates Not updated (monitor)Maintained
Interest expense impact post-refinancing2025–2026N/A“Immaterial impact” expected New clarity
Quarterly dividend per shareCurrent$1.74 declared (Jul & Oct) $1.74 declared (Dec payment) Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 & Q3)Current Period (Q4 2025)Trend
Aggregator strategy (Uber, DoorDash)Full DoorDash rollout; 50% incrementality framework; multi-year tailwind; aim for on-platform share to match off-platform leadership Canada DoorDash expansion to ~600 stores; continued U.S. build and marketing cadence Strengthening
Renowned value (Best Deal Ever, Mix & Match)Extended at franchisee request; drives profitable order counts and carryout/delivery comps Specialty Pizzas now $9.99 daily in Mix & Match; value with craveability reinforced in Q4 ads Sustained
Product innovationParmesan Stuffed Crust high mix/ticket, evergreen; Bread Bites flavors, operational simplification New Spicy Chicken Bacon Ranch Specialty Pizza launch Sustained
Brand & digitalE-commerce platform rollout (website/mobile web live; apps coming); brand refresh “Dommmino’s” Brand refresh rolling out across boxes, media, app/site (Q4 launch) Accelerating
Supply chain/procurementMargin aided by procurement productivity; slight YoY improvement expected, some seasonality Continued productivity tailwinds expected, near-term utility seasonality Stable/positive
Macro/tariffs/mixCategory ~1% YTD; macro slowing observed at start of Q4; lower-income cohorts still growing at DPZ Macro caution persists; initiatives designed to offset Cautious

Management Commentary

  • Prepared remarks emphasized balanced comp growth from ticket (Stuffed Crust) and transactions (Best Deal Ever, aggregators), with carryout comps +8.7% and delivery +2.5% in Q3 .
  • Quote: “We are pricing for profitability of the franchisees… in a challenged environment, to put up the comps that we did… we feel really good about our delivery business.” — CFO Sandeep Reddy .
  • Quote: “We have best in class franchisee economics… the largest advertising budget, a supply chain with incredible purchasing power, and a rewards program that is bigger than ever.” — CEO Russell Weiner .
  • On refinancing: two $500M tranches at ~5.1% blended rate; expected immaterial interest impact in 2025–26 .

Q&A Highlights

  • Macro/comp guidance: Management reiterated +3% U.S. SSS for FY 2025 but flagged industry softening early Q4; initiatives expected to support share gains even if comps face pressure .
  • Aggregator economics and share: Strategy to achieve “fair share” on platforms over time; pricing disciplined to ensure franchisee profitability; Uber skews urban/higher-income, DoorDash larger and more rural; ~50% incrementality framework reaffirmed .
  • Carryout vs delivery mix: Carryout strength driven by loyalty redesign, Best Deal Ever and Stuffed Crust; limited crossover from delivery (mid-teens%)—growth is incremental .
  • Development pipeline: Confidence in 175+ U.S. net adds for 2025, pathway to ~7,700 by 2028; competitor closures open white space; broadened builder base .
  • International unit growth: China (~300) and India (~250) expected store adds; DPE closures mostly behind if SSS stabilizes; working to improve unit economics .

Estimates Context

  • S&P Global/Capital IQ consensus for Q4 2025 EPS and revenue was unavailable due to provider limits at time of request; as a result, we anchor context on Q3 execution and Q4 initiatives. Values retrieved from S&P Global.
  • Given early-Q4 macro softening and ongoing aggregator/brand/value activations, estimate revisions will likely focus on transaction elasticity, gross margin cadence (procurement vs basket), and NI/EPS sensitivity to tax and investment marks (DPC Dash), as observed in Q3 .

Key Takeaways for Investors

  • Near-term: Expect Q4 narrative to be driven by value-led transaction growth (Best Deal Ever, $9.99 Specialty Pizza) and aggregator scale; monitor whether macro softness tempers full-year U.S. +3% comp despite share gains .
  • Margins: Supply chain margin tailwinds from procurement productivity persist, but watch food basket (+3.3% in Q3) and utility seasonality; consolidation should support operating income growth near guide .
  • Capital structure: Post-refi, interest headwinds limited near term; dividend ($1.74) underscores cash flow resilience; ongoing repurchases support EPS .
  • Structural share gains: Brand refresh and evergreen product innovation (Stuffed Crust) plus loyalty changes position DPZ to capture mix/ticket while preserving value perception and order frequency .
  • International: Strong pipelines in India/China offset DPE drag; FX remains a watch item; operating momentum ex-FX intact .
  • Execution lens: Focus on carryout frequency compounding and aggregator ramp kinetics; order count is the key leading indicator of franchisee profitability, a central tenet of DPZ’s pricing/value strategy .
  • Trading setup: Q4 headline prints will hinge on comps and margin mix vs macro; catalysts include measured aggregator build, the brand refresh rollout, and holiday promotional cadence (value + craveability) .

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