Are competitors acting more rationally? How will competitor store closures impact Domino's?

Russell Weiner noted competitors are mimicking Domino's value promotions, which creates short-term headwinds but is unsustainable for their franchisee economics due to Domino's superior advertising budget. He expects this pressure to lead to more competitor store closures (450 already announced for 2026), benefiting Domino's sales, stores, and profits. “I do not believe that our competition can drive those kinds of volumes because their advertising budget, ours is as big as the biggest 2 competitors combined, just can't do that.”

Given increased competition in delivery channels and concerns about the pizza category's 1-2% growth, is 3% comp growth still appropriate for Domino's?

Russell Weiner reaffirmed the historical 1-2% pizza category growth and Domino's ability to outperform. He highlighted that being on aggregators helps capture higher-income customers, mitigating delivery hits during tight times. Sandeep Reddy emphasized the significant runway in the $21 billion carryout market where Domino's has only 20% share, compared to 33% in the $17 billion delivery market. “The carryout category size is $21 billion. That's about half of all of QSR pizza. Our share there is just 20%. We have significant runway of growth on the carryout business that we can actually tap into.”

What kind of pizza innovation is planned, and is there an opportunity to expand into non-pizza categories like premium chicken and sandwiches given the operating platform?

Russell Weiner confirmed upcoming "bold, exciting" pizza innovation, some moved up or newly added to the calendar. He noted that over 40% of sales are non-pizza, and Domino's has a wide variety of chicken products and sandwiches (launched in 2008). The current focus is on optimizing existing offerings through the pizza oven, but the product innovation pipeline is robust. “This is stuff that's either moved up in the calendar this year or didn't even exist on our calendar before that got started. And as I said, I'm really excited about those. And I guess you'll have to just wait and see, but I promise you, you will be as well.”

DPZ

Dominos Pizza (DPZ) Q1 FY26 earnings call: guidance and Q&A

Earnings call· Mar 2026 (Q1 FY26)· Consumer Discretionary· Apr 27, 2026

Source: earnings call transcript

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

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

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

Category	Target	Timeline	Confidence
U.S. same-store sales growth	low single digits high materiality	FY26	Medium
International same-store sales growth	low single digits medium materiality	FY26	Medium
U.S. net store growth	175 plus net stores medium materiality	FY26	High
International net store growth	approximately 800 net stores medium materiality	FY26	High
Global retail sales growth	mid-single digits high materiality	FY26	Medium
Operating income growth	mid- to high single digits high materiality	FY26	Medium
Long-term algorithm	unchanged high materiality	through 2028	High

Segment performance

Segment	Revenue	YoY	QoQ	Margin
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)	—	—

Risks & headwinds

Consumer uncertainty and ongoing inflation Q1 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 pizza Q1 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 uncertainty Q1 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) performance Q1 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 prices current

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

What to watch in Q2 FY26

U.S. Same-Store Sales Growth

Q2 FY26 and H2 FY26

Current 0.9% in Q1 FY26

Target Acceleration 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.

Find out whether DPZ delivers this. Inve re-checks your case every morning.

Q&A highlights

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 read 5 chapters

Detailed narrative

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.

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.

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.

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.

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.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.