Domino's Pizza, Inc. DPZ reported first-quarter fiscal 2025 results. Its earnings beat the Zacks Consensus Estimate, while revenues missed the same. Nonetheless, the top and bottom lines increased from the prior-year quarter’s reported numbers.
Following the announcement, the company’s shares lost 4% in today’s pre-market trading session.
Moreover, the company reported benefits from the Hungry for MORE strategy during the quarter, registering growth in market share across the U.S. and international segments. DPZ continued to manage controllable factors well despite a tough global environment. The strategy supported an increase in sales, store openings and profits. These factors are important for long-term value creation for franchisees and shareholders.
DPZ's Q1 Earnings & Revenue Discussion
In the quarter, Domino's reported adjusted earnings per share (EPS) of $4.33, which surpassed the Zacks Consensus Estimate of $4.12. The bottom line also rose 21% from $3.58 reported in the year-ago quarter.
Revenues of $1.11 billion missed the consensus mark of $1.12 billion. However, the top line increased 2.5% on a year-over-year basis. This upside can be attributed to strong contributions from U.S. franchise advertising revenues, higher supply-chain revenues and international franchise royalties and fees. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
Domino's Pizza Inc Price, Consensus and EPS Surprise
Domino's Pizza Inc Price, Consensus and EPS Surprise
In first-quarter fiscal 2025, Domino's had 223 gross store openings and 231 gross store closures.
DPZ’s Other Metrics
Global retail sales (excluding foreign currency impact) rose 4.7% on a year-over-year basis. This upside was driven by a year-over-year increase in international (8.2%) and U.S. store sales (1.3%).
Comps at Domino’s domestic stores (including company-owned and franchise stores) declined 0.5% year over year.
At domestic company-owned stores, Domino’s comps fell 2.9% against the 8.5% rise reported a year ago.
Domestic franchise store comps declined 0.4% against a 5.5% rise reported in the prior-year quarter.
Comps at international stores, excluding foreign currency translation, rose 3.7% compared with a 0.9% improvement reported in the prior-year quarter. We estimated the metric to increase 1.6% year over year.
DPZ’s Q1 Margins
In the fiscal first quarter, Domino’s gross margin expanded 90 basis points (bps) year over year to 39.8%. However, U.S. company-owned store gross margin contracted 150 bps year over year to 16%. This downside can be attributed to the increase in the company’s food basket pricing to stores and lower sales leverage.
Net income margin was 13.5%, up 190 bps from the year-ago quarter’s numbers.
Balance Sheet of DPZ
As of March 23, 2025, cash and cash equivalents totaled $304.3 million compared with $186.1 million as of Dec. 29, 2024. Long-term debt (less current portion) at the end of the fiscal first quarter totaled $3.83 billion, which was in line with fiscal 2024-end. Inventory amounted to $73.2 million compared with $70.9 million as of Dec. 31, 2024.
Capital expenditure at the end of the fiscal first quarter totaled $14.7 million, down from $20.2 million reported in the prior-year quarter.
During the reported quarter, the company repurchased 115,280 shares for an aggregated cost of $50 million. As of March 23, 2025, DPZ stated the availability of $764.3 million under its repurchase program.
Management declared a cash dividend of $1.74 per share. The dividend will be paid on June 30, 2025, to its shareholders of record as of June 13, 2025.
DPZ’s Zacks Rank
Domino's currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.
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