Domino’s Pizza (DPZ) reported first-quarter earnings that outpaced expectations, signaling resilience in an otherwise challenging environment for U.S. restaurants.
The pizza giant posted earnings of $4.33 per share, a 21% increase from a year ago, beating analysts' average forecast of $4.06. Total revenue for the quarter came in at $1.11 billion, up 2.5% year-over-year but slightly below Wall Street’s target of $1.13 billion.
While earnings benefitted from aggressive share repurchases over the past year, the company faced setbacks in its home market. Same-store sales in the U.S. fell 0.5%, missing expectations for a modest rise. Economic uncertainty, compounded by elevated inflation and weakened consumer sentiment, especially among lower-income households, weighed heavily on domestic performance.
Still, Domino’s shares have remained resilient, rising about 16% year-to-date, even as the broader S&P 500 has declined. The company reaffirmed its annual goal of 3% growth in U.S. comparable sales, though management warned that persistent economic pressures could pose risks to achieving that target.
International Momentum Bolsters Results
While U.S. operations struggled, Domino’s international performance provided a critical offset. Same-store sales outside the United States climbed 3.7%, well above the 1.93% growth analysts had forecast. Global retail sales, which include both company-owned and franchised locations, rose 4.7% compared to the previous year, highlighting the chain’s strength abroad.
International franchise royalties and fees were major contributors to revenue growth, helping to cushion the impact of weaker U.S. delivery business. Despite some currency headwinds, Domino’s international market strategy continues to deliver consistent gains, reinforcing its status as one of the few American restaurant chains significantly shielded from domestic economic volatility.
The company's CEO Russell Weiner emphasized the importance of global expansion and operational control, stating, "Sustained market share growth reflects a company’s ability to control what is under its control, a key to long term success."
Strategic Shifts Target Recovery
Domino’s is aggressively adapting to soften the blow from a cautious U.S. consumer. A new partnership with DoorDash, complementing its earlier tie-up with Uber Eats (UBER), will soon allow customers to order Domino’s through major third-party delivery platforms. After a successful pilot launch, a full U.S. rollout is expected in May, followed by an expansion into Canada later this year. Management expects these initiatives to boost traffic and delivery sales, particularly in the second half of 2025.
Additionally, the launch of its Parmesan Stuffed Crust Pizza — billed as the biggest menu addition in company history — has shown promising early results, though it had limited impact on the first quarter due to timing. Domino’s anticipates stronger contributions from the new product line as the year progresses.
Even as U.S. gross margins slipped to 16% from 17.5% a year ago due to rising food costs, Domino’s is positioning itself for a turnaround. With easier year-over-year comparisons and new strategic levers, the company remains cautiously optimistic about regaining momentum domestically in the second half of 2025.
While macroeconomic uncertainty still looms, Domino’s diversified global footprint, innovation efforts, and strategic delivery partnerships place it in a stronger position than many of its more U.S.-dependent peers.
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