Domino's Pizza Reports Disappointing Sales, Stock Drops
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2 days ago
0mins
Should l Buy DPZ?
Source: Newsfilter
- Weak Same-Store Sales: Domino's reported a disappointing 0.9% growth in U.S. same-store sales, significantly below the 2.3% expected by Wall Street analysts, leading to a 10% drop in stock price during morning trading on Monday, indicating market disappointment with the company's performance.
- Lowered Full-Year Forecast: The company revised its full-year U.S. same-store sales growth forecast down to low-single digits from a previous estimate of 3%, reflecting a challenging outlook amid pressures from winter weather and declining consumer sentiment.
- Increased Competition: Domino's faces intensified competition from rivals like Papa John's and Pizza Hut, which have matched its $9.99 promotional pricing, further squeezing Domino's market share and highlighting the competitive landscape in the pizza industry.
- Long-Term Confidence: Despite short-term challenges, CEO Russell Weiner expressed confidence in the company's long-term prospects, citing a larger advertising budget compared to competitors and potential market opportunities arising from the possible sale of rival chains, which could enhance Domino's market position.
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Analyst Views on DPZ
Wall Street analysts forecast DPZ stock price to rise
15 Analyst Rating
6 Buy
8 Hold
1 Sell
Moderate Buy
Current: 332.310
Low
370.00
Averages
464.83
High
556.00
Current: 332.310
Low
370.00
Averages
464.83
High
556.00
About DPZ
Domino’s Pizza, Inc. is a pizza company with a significant business in both delivery and carryout. The Company operates through three segments: U.S. stores, international franchise, and supply chain. The U.S. stores segment is comprised primarily of its franchise operations, which consists of franchised stores located in the United States. The segment also operates a network of United States Company-owned stores. The international franchise segment primarily includes operations related to the Company’s franchising business in foreign markets. The supply chain segment primarily includes the distribution of food, equipment and supplies to stores from the Company’s supply chain center operations in the United States and Canada. It is primarily a franchisor, with approximately 99% of its global stores owned and operated by its independent franchisees. In its international markets, the Company generally grants geographical rights to the Domino’s Pizza brand to master franchisees.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Market Position Strengthening: As the largest pizza company globally, Domino's operates over 22,300 stores in more than 90 markets, with global retail sales exceeding $20.4 billion in the first quarter of 2026, showcasing its robust presence in delivery and carryout.
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- Same-Store Sales Growth: While same-store sales increased marginally, the U.S. growth was only 0.9%, which, when adjusted for inflation, suggests a real decline in sales, reflecting the pressure on consumer spending.
- Share Buyback Plan: The company announced an additional $1 billion allocation for stock buybacks, demonstrating management's confidence in the company's value, although the market's negative reaction indicates investor concerns about future growth.
- Operating Income Growth: Despite a $30 million non-cash loss impacting net income, Domino's operating income rose by 10%, driven by a more efficient supply chain and increased franchise fees, showcasing the core business's strong profitability.
See More
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- Revenue Expectations: Revenue is projected to reach $3.07 billion, reflecting persistent consumer demand for fast food despite declining sales, yet growth remains sluggish.
- Same-Store Sales Decline: Analysts forecast a 0.7% decline in same-store sales this quarter, continuing a trend where Chipotle reported sales declines in three of the last four quarters, highlighting intensified market competition.
- Economic Environment Impact: The ongoing U.S. conflict with Iran has led to soaring fuel prices, reducing consumers' disposable income, which makes Chipotle's sales outlook increasingly uncertain and could affect future performance.
See More
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- Technical Issue Remediation: Domino's online ordering platform faced disruptions due to a third-party technology issue on April 24, affecting customers during a 50% off pizza promotion; to compensate, the company is reintroducing the half-price offer from May 6 to May 9, despite the issue being resolved.
- Promotion Details: The half-price deal applies to all menu pizzas, including Specialty Pizzas, Handmade Pan, and Parmesan Stuffed Crust, allowing customers to order online, by phone, or in-store, enhancing purchasing convenience.
- Market Position Strengthening: As the largest pizza company globally, Domino's operates over 22,300 stores in more than 90 markets, with global retail sales exceeding $20.4 billion in the first quarter of 2026, showcasing its robust presence in delivery and carryout.
- Digital Transformation Success: In 2025, over 85% of Domino's U.S. retail sales came from digital channels, highlighting the effectiveness of its innovative ordering platforms and further solidifying its market leadership.
See More
Alsea SAB de CV Reports Q1 Earnings Highlights
- Sales Growth: Alsea SAB de CV reported a 1.4% year-over-year increase in total sales for Q1, reaching 20.1 billion pesos, with a 5.8% increase when excluding foreign exchange effects, indicating effective expansion strategies in high-return locations and formats.
- Same-Store Sales Performance: Same-store sales grew by 4.1%, with notable contributions from Starbucks in South America and Domino's Pizza in Colombia, reflecting the company's strengthening brand influence and customer loyalty in specific markets.
- Digital Transformation: Digital platforms significantly contributed to growth, with loyalty sales increasing by 12% and digital orders accounting for 41.2% of total sales, demonstrating the company's ongoing efforts to enhance customer experience and operational efficiency.
- Net Income Decline: Despite sales growth, net income for the first quarter decreased by 65.7% year-over-year, primarily impacted by a one-off effect from debt refinancing, highlighting challenges in financial management and cost control.
See More
Domino's Pizza Earnings Analysis and New AI Partnership Developments
- Earnings Miss: Domino's Pizza reported Q1 2026 results with adjusted earnings of $4.13 per share, falling short of the $4.28 expected, and revenue of approximately $1.2 billion, slightly below the $1.17 billion forecast, indicating a 3.5% total revenue increase but only 0.9% growth in the U.S. market, reflecting tightening consumer spending.
- Share Buyback Initiative: The company announced an additional $1 billion for share buybacks, demonstrating management's confidence in the stock's undervaluation, with a 38% reduction in share count over the past decade contributing to a total return of 192%, although market reactions remain tepid, warranting investor attention on long-term effects.
- Operating Income Growth: Despite net income being impacted by investment losses, Domino's operating income rose by about 10% this quarter due to a more efficient supply chain and higher franchise fees, indicating strong core business profitability, even as the market reacted negatively to short-term earnings reports.
- AI Partnership Update: Microsoft has modified its partnership terms with OpenAI, eliminating revenue share payments for its own products using OpenAI models, significantly boosting Microsoft's margins, while OpenAI gains flexibility to license its models to other cloud providers, suggesting a more diversified future collaboration between the two companies.
See More
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- Disappointing Performance: Domino's reported adjusted earnings of $4.13 per share for Q1 2026, missing the expected $4.28, with revenue around $1.2 billion falling short of the $1.17 billion forecast, indicating signs of consumer spending slowdown.
- Same-Store Sales Growth: While same-store sales increased marginally, the U.S. growth was only 0.9%, which, when adjusted for inflation, suggests a real decline in sales, reflecting the pressure on consumer spending.
- Share Buyback Plan: The company announced an additional $1 billion allocation for stock buybacks, demonstrating management's confidence in the company's value, although the market's negative reaction indicates investor concerns about future growth.
- Operating Income Growth: Despite a $30 million non-cash loss impacting net income, Domino's operating income rose by 10%, driven by a more efficient supply chain and increased franchise fees, showcasing the core business's strong profitability.
See More
Chipotle Reports Continued Same-Store Sales Declines
- Sales Performance Decline: Chipotle has reported same-store sales declines in three of the last four quarters, with projections indicating a further 0.7% drop this quarter, highlighting weak consumer demand and increasing market competition.
- Significant Stock Drop: Over the past year, Chipotle's stock has plummeted 35%, which not only undermines investor confidence but also poses greater challenges for the company's future financing and expansion plans.
- Earnings Report Expectations: Analysts expect Chipotle to report earnings of 24 cents per share and revenue of $3.07 billion in its upcoming first-quarter earnings report, indicating ongoing challenges in profitability.
- Economic Uncertainty: The U.S. conflict with Iran has led to soaring fuel prices, reducing consumers' disposable income, which casts a darker outlook on Chipotle's sales prospects and reflects the negative impact of the overall economic environment on the restaurant industry.
See More
Chipotle's Q1 Earnings Expectations
- Earnings Per Share Forecast: Analysts expect Chipotle to report earnings per share of 24 cents for Q1, indicating pressure on profitability amid ongoing sales challenges.
- Revenue Expectations: Revenue is projected to reach $3.07 billion, reflecting persistent consumer demand for fast food despite declining sales, yet growth remains sluggish.
- Same-Store Sales Decline: Analysts forecast a 0.7% decline in same-store sales this quarter, continuing a trend where Chipotle reported sales declines in three of the last four quarters, highlighting intensified market competition.
- Economic Environment Impact: The ongoing U.S. conflict with Iran has led to soaring fuel prices, reducing consumers' disposable income, which makes Chipotle's sales outlook increasingly uncertain and could affect future performance.
See More
