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    DPZ
    Earnings call· Mar 2026(Q1 FY26)

    DOMINOS PIZZA Q1 FY26 earnings call DPZ

    Apr 27, 2026 Source

    Executive summary

    Domino's Q1 FY26 — Strategic Adjustments Amidst Macro Headwinds

    Domino's Q1 FY26 performance saw U.S. same-store sales grow 0.9%, below expectations, as consumer uncertainty and increased competitive value promotions intensified throughout the quarter. Despite these headwinds, the company continued to gain market share and grow its store count, particularly in the carryout segment. Management is making strategic adjustments to its marketing calendar and product innovation pipeline for the second half of the year to drive improved performance and remains committed to its long-term growth algorithm.

    Highlights

    5

    • U.S. Q1 same-store sales grew 0.9%, driven by positive order counts and average ticket, and continued market share gains.

    • Global retail sales grew 3.4% ex-FX, supported by positive U.S. comps and over 900 net new stores globally in the last 12 months.

    • The company repurchased approximately 446,000 shares for $170 million year-to-date FY26, with an additional $1 billion authorization.

    • U.S. system added 19 net new stores in Q1, bringing the total to over 7,200.

    • Carryout comps were up 2.4% in Q1, demonstrating continued strength in this segment.

    Concerns

    5

    • Q1 U.S. same-store sales of 0.9% came in below expectations, with pressure intensifying throughout the quarter, particularly in March.

    • International same-store sales declined 0.4% in Q1, primarily due to macro and geopolitical uncertainty, and specifically the impact from Domino's Pizza Enterprises (DPE).

    • The company revised its full-year FY26 U.S. same-store sales guidance to "low single digits" from the previous objective of 3%.

    • Full-year FY26 international same-store sales guidance was also revised to "low single digits" due to global macro and geopolitical uncertainty.

    • Operating income growth for FY26 is now expected to be "mid- to high single digits," down from previous expectations, due to lower sales.

    Guidance & targets

    7
    CategoryTargetConfidence
    U.S. same-store sales growth
    low single digits
    high materiality
    Medium
    International same-store sales growth
    low single digits
    medium materiality
    Medium
    U.S. net store growth
    175 plus net stores
    medium materiality
    High
    International net store growth
    approximately 800 net stores
    medium materiality
    High
    Global retail sales growth
    mid-single digits
    high materiality
    Medium
    Operating income growth
    mid- to high single digits
    high materiality
    Medium
    Long-term algorithm
    unchanged
    high materiality
    High

    Segment performance

    2
    SegmentRevenueYoYQoQMargin
    U.S.
    Same-store sales driven by positive order counts and average ticket, with 0.9% pricing partially offset by negative mix. Carryout comps up 2.4%, delivery down 0.3%. Continued market share gains in the QSR pizza category.
    Same-store sales growth: 0.9%Retail sales growth: 2.8%Net new stores: 19System store count: >7,200
    		————
    International
    Retail sales growth driven by net store growth. Same-store sales decline primarily due to macro and geopolitical uncertainty, and specifically the impact from Domino's Pizza Enterprises (DPE). Excluding DPE, performance met expectations.
    Same-store sales decline: 0.4%Net new stores in Q1: 161Net new stores over last 12 months: >900 (global)
    		—4% (ex-FX)——

    Operational metrics

    22
    Income from operations growth
    4.2%
    Q1 FY26

    Came in below expectations.

    Global retail sales growth
    3.4%
    Q1 FY26

    Driven by positive U.S. comps and global net store growth of more than 900 stores over the past 12 months.

    U.S. QSR pizza category growth
    1% to 2%consistent
    annual average

    Management expects this trend to continue.

    U.S. market share gain
    11 points
    past 11 years

    Achieved through driving more sales, stores, and profits.

    U.S. same-store sales growth (annual average)
    >5%
    annual average

    Part of the long-term growth formula.

    Net new stores (U.S.)
    2,000+
    past 11 years

    Achieved amidst significant competitive closures.

    Average franchisee profit increase per store
    $80,000
    past 11 years

    Total system profit increased by $740 million over the same period.

    Operating income (2015)
    $400M
    FY15

    Baseline for cash flow generation comparison.

    Operating income (2025)
    $950M
    FY25

    Growth in operating income over a decade.

    Capital returned to shareholders
    $7.7B
    2015-2025

    Dividend grew annually by over 20% on average.

    Share repurchases (YTD FY26)
    $170M
    YTD FY26

    Part of capital allocation strategy.

    Remaining share repurchase authorization
    $1.29B
    as of April 21

    Reflects board approval of additional authorization.

    Leverage ratio
    4.3xdown from 5.4x (Dec 2023)
    Q1 FY26

    Within expected range of 4 to 6x.

    Dividend growth (annual average)
    >20%
    annual average

    Raised 15% this year.

    QSR pizza delivery category size
    $17B
    current

    Aggregator business is roughly $5B of this.

    Domino's share of delivery business
    33%
    current

    Compared to 20% share in carryout.

    QSR pizza carryout category size
    $21B
    current

    About half of all QSR pizza, representing a significant opportunity.

    Domino's share of carryout business
    20%
    current

    Significant runway for growth to reach parity with delivery share.

    Competitive store closures (public competitors)
    450
    FY26

    Expected for 2026, similar to 2025. Management believes this will benefit Domino's.

    Non-pizza sales mix
    40%+
    current

    Includes sandwiches and various chicken products.

    Pricing impact on U.S. ticket
    0.9%
    Q1 FY26

    Partially offset by negative mix impact.

    Operating income contribution from Middle East
    ~2%
    current

    For perspective on war impact on international business.

    Industry KPIs

    3
    MetricValueDetails
    Comparable sales comps0.9%%
    Global system wide sales3.4%%
    Net unit growth development pipeline19stores

    Risks & headwinds

    5
    Consumer uncertainty and ongoing inflationQ1 FY26, intensified in March

    Consumer sentiment hit COVID level lows

    Mitigation: Adjusting plans in H2 FY26, focusing on profitable value and product innovation.

    Increased competitive activity in QSR pizzaQ1 FY26

    National pizza players offer deals comparable, if not identical, to Domino's value

    Mitigation: Leveraging 'profit power' and industry-leading advertising budget; expecting competitive pressure to lead to competitor store closures over time.

    Macro and geopolitical uncertaintyQ1 FY26 and expected for FY26

    International same-store sales decline of 0.4%

    Mitigation: Monitoring carefully, underlying business (ex-DPE) is on track; working with DPE to improve value equation.

    Impact of Domino's Pizza Enterprises (DPE) performanceQ1 FY26 and ongoing

    Excluding DPE, international business would have met expectations

    Mitigation: Constant conversations with DPE, exploring structural changes to portfolio, leveraging contractual powers to drive change.

    Higher gas pricescurrent

    null

    Mitigation: Focusing on profitable value to address impact on consumer disposable income; driver staffing levels are strong.

    What to watch in Q2 FY26

    5

    U.S. Same-Store Sales Growth

    Q2 FY26 and H2 FY26
    Current0.9% in Q1 FY26
    TargetAcceleration towards 3% objective

    Why it matters

    Management has revised full-year guidance but maintains an internal objective of 3% U.S. comps, relying on H2 adjustments and innovation.

    We are committed to doing everything we can to deliver 3% same-store sales in the U.S. for the year.

    Q&A highlights

    6

    Why does management expect comps to accelerate despite tougher comparisons, and what adjustments (e.g., more value, innovation) are planned?

    Russell Weiner stated that while guidance was revised, the objective remains 3% U.S. same-store sales for the year. Plans include adjusting the marketing calendar and introducing new pizza innovation starting in May, beyond original plans, to adapt to the macro environment. Sandeep Reddy emphasized confidence in positive low single-digit comps and continued store growth.

    “Our plans moving forward will look very different than they were starting the year, and that's because we adapt to what's going on in the broader environment.”

    asked by David Tarantino · answered by Russell Weiner

    2 min read5 chapters

    Detailed Narrative

    01

    Q1 Performance and Macro Environment

    Domino's Q1 FY26 U.S. same-store sales grew 0.9%, falling short of expectations due to intensifying pressure throughout the quarter, particularly in March. This was attributed to growing consumer uncertainty🌐, ongoing inflation impacting purchase decisions, and adverse weather conditions. Consumer sentiment hit COVID-level lows, especially affecting lower-income customers.

    02

    Competitive Landscape and Value Strategy

    The QSR pizza space saw increased competition in Q1, with national players offering deals comparable to Domino's value propositions. Management believes Domino's is better positioned for a sustained value environment due to its "profit power" and industry-leading advertising budget, which drives the necessary order counts for profitable value. This competitive pressure is expected to lead to more store closures for competitors, benefiting Domino's in the long run.

    03

    Technology and Operational Excellence

    The company fully launched a new app with improvements to its Pizza Tracker, now featuring AI technology for more precise ready times and personalization. Internally, the DomOS orchestration agent aims for "just in-time pizza making" to enhance efficiency and product quality by alerting stores to hold orders until a driver is available, reducing wait times and improving consistency.

    04

    Long-Term Growth Formula

    Russell Weiner reiterated the "more sales, more stores, and more profits" formula, citing 11 points of market share gain over the past 11 years, average annual same-store sales growth over 5%, over 2,000 net new stores, and an increase of nearly $80,000 in average franchisee profits per store. This strategy is expected to continue driving market share and competitive advantage.

    05

    Capital Allocation and Shareholder Returns

    Domino's repurchased $170 million in shares year-to-date FY26, with an additional $1 billion authorization. The company highlighted its strong cash flow generation, growing operating income from $400 million in 2015 to $950 million in 2025, and free cash flow from $230 million to $670 million over the same period. Over $7.7 billion has been returned to shareholders through buybacks and dividends, while maintaining a leverage ratio of 4-6x.

    AI-generated summary of the company’s earnings call. Not investment advice.