Fast-food pizza chain Domino’s (NYSE: DPZ) missed Wall Street’s revenue expectations in Q1 CY2025 as sales rose 2.5% year on year to $1.11 billion. Its non-GAAP profit of $4.33 per share was 6.3% above analysts’ consensus estimates.
Is now the time to buy DPZ? Find out in our full research report (it’s free).
Domino's (DPZ) Q1 CY2025 Highlights:
- Revenue: $1.11 billion vs analyst estimates of $1.13 billion (2.5% year-on-year growth, 1.2% miss)
- Adjusted EPS: $4.33 vs analyst estimates of $4.07 (6.3% beat)
- Adjusted EBITDA: $230.5 million vs analyst estimates of $235.8 million (20.7% margin, 2.3% miss)
- Operating Margin: 18.9%, in line with the same quarter last year
- Free Cash Flow Margin: 14.8%, up from 9.5% in the same quarter last year
- Locations: 21,358 at quarter end, up from 20,755 in the same quarter last year
- Same-Store Sales rose 1.6% year on year (3.2% in the same quarter last year)
- Market Capitalization: $16.4 billion
StockStory’s Take
Domino’s Q1 results were shaped by the introduction of its Parmesan Stuffed Crust pizza, ongoing value-focused promotions, and a challenging macroeconomic environment that impacted both delivery and carryout traffic. Management discussed the initial performance of the new stuffed crust item, which launched late in the quarter, and highlighted strategic investments in digital platforms and franchisee support as key contributors to maintaining market share amid competitive pressures. CEO Russell Weiner emphasized, “We’re excited about the impact this product will have not only this year, but as a market share driver for years to come.”
Looking ahead, Domino’s leadership focused on the expected benefits from its DoorDash partnership, which is set for a national rollout in the coming months. The company reiterated its strategy of combining its own digital channels with third-party aggregator platforms to reach a broader customer base. CFO Sandeep Reddy noted, “All of our key initiatives, including aggregator partnerships and new product launches, are incorporated into our full-year outlook,” while also cautioning that continued macroeconomic headwinds could affect same-store sales expectations.
Key Insights from Management’s Remarks
Domino’s management attributed Q1 performance to a combination of new product initiatives, operational improvements, and expanding digital partnerships. They also commented on the external pressures facing the quick-service restaurant (QSR) industry, including consumer spending trends and heightened competition.
• Stuffed Crust Pizza Launch: The Parmesan Stuffed Crust pizza was launched in early March, representing Domino’s largest new menu item in years. While it had limited impact on Q1 results due to timing, management reported strong initial customer feedback and a high proportion of orders including the new crust. Russell Weiner stated that this launch filled a major gap in the menu and is expected to contribute meaningfully to future sales.
• DoorDash Aggregator Rollout: Domino’s initiated a pilot with DoorDash, the largest delivery aggregator in the US, and plans a national rollout by the end of Q2. Management expects approximately 50% of the orders through DoorDash to be incremental, citing the platform’s scale compared to previous partnerships. The anticipated impact is weighted toward the second half of the year.
• Organizational Restructuring: In Q1, Domino’s elevated Joe Jordan to Chief Operating Officer and promoted Weiking Ng to Head of International. The company also streamlined its structure, resulting in some severance expenses but aiming for greater market agility and efficiency in pursuing its “Hungry for MORE” strategy.
• Value and Loyalty Initiatives: Promotions like the “Best Deal Ever” and ongoing enhancements to the Domino’s Rewards loyalty program supported customer retention and frequency, particularly among carryout customers. Management cited the multi-year impact of loyalty on driving repeat business.
• International Store Dynamics: While the international unit count declined due to closures by the Australia-based master franchisee (mainly in Japan), core international markets such as India and Canada outperformed, driven by localized value campaigns and digital channel adoption.
Drivers of Future Performance
Management’s outlook for the remainder of the year is shaped by the phased rollout of new menu items, expansion of third-party delivery partnerships, and ongoing investments in customer-facing technology, all set against a backdrop of macroeconomic uncertainty and shifting consumer preferences.
• Aggregator Platform Expansion: The full nationwide launch of DoorDash is expected to significantly broaden Domino’s delivery reach, with management estimating that about half of the orders from this channel will be incremental to existing sales.
• Loyalty and Digital Initiatives: The enhanced Domino’s Rewards program is designed to attract light and infrequent users by lowering the barrier to earning rewards, which management believes will support long-term frequency growth and customer retention across both carryout and delivery segments.
• International Market Volatility: Management highlighted potential risks from geopolitical instability and macroeconomic pressures in international markets. These factors are reflected in the company’s conservative outlook for international same-store sales and unit expansion for the rest of the year.
Top Analyst Questions
• Danilo Gargiulo (Bernstein): Asked about geopolitical pressures and international boycotts, to which Sandeep Reddy responded that volatility is mostly incorporated into guidance and no elevated risk for Domino’s has been observed so far.
• Brian Bittner (Oppenheimer): Inquired about the expected sales lift from DoorDash versus Uber Eats. Russell Weiner explained that DoorDash’s pizza sales are roughly double Uber’s and that this will be a key contributor in the second half.
• David Tarantino (Baird): Sought more detail on the stuffed crust pizza’s impact. Weiner replied that it was too early for a major effect, but early adoption and feedback are promising, with further data to come as repeat purchases are tracked.
• Peter Saleh (BTIG): Questioned potential headwinds from tariffs and supply chain constraints on US unit growth. Reddy affirmed the 175 net new store target, stating that franchisee economics remain compelling and tariffs are not a material concern.
• Sara Senatore (Bank of America): Asked how persistent macroeconomic headwinds might impact the 3% same-store sales target. Both executives said their guidance assumes a tough environment and is back-half weighted due to the timing of initiatives, but further deterioration could present downside risk.
Catalysts in Upcoming Quarters
In coming quarters, the StockStory team will be monitoring (1) the impact of the DoorDash rollout on delivery traffic and overall sales mix, (2) adoption rates and repeat purchase patterns for the Parmesan Stuffed Crust pizza, and (3) the pace of domestic and international store openings relative to management’s goals. Additional attention will be paid to how Domino’s navigates macroeconomic pressures and competitive value promotions as the year progresses.
Domino's currently trades at a forward P/E ratio of 26.9×. Should you double down or take your chips? Find out in our free research report.
Stocks That Trumped Tariffs in 2018
Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.
While this has caused many investors to adopt a "fearful" wait-and-see approach, we’re leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.
