What Domino's Pizza (DPZ) Said on Its Q3 Earnings Call

Key Points

• Q3 operating income rose 8.5% excluding foreign-currency and refranchising effects, while global retail sales increased 3.2% and order counts grew in both delivery and carryout.
• U.S. same-store sales rose only 0.3% as customers ordered fewer items, lowering average ticket sizes; management is emphasizing value promotions, product innovation and aggregator platforms to support demand.
• Domino’s lowered its 2026 U.S. store-opening outlook to 125–150 locations and expects international same-store sales to be roughly flat, citing weaker franchisee profitability and challenging consumer conditions.

Domino's Pizza NASDAQ: DPZ reported third-quarter operating income growth of 8.5%, excluding foreign-currency effects and minor refranchising true-up impacts, as higher franchise royalties and fees and supply-chain performance helped offset a challenging consumer backdrop.

During the company’s earnings call, Chief Executive Officer Joe Jordan said demand remained strong, with order counts increasing in both delivery and carryout and the company continuing to gain share in the quick-service pizza category. However, lower average ticket sizes constrained same-store sales as customers reduced items per order.

Jordan, speaking on his first earnings call as CEO, said his priorities are to get closer to customers and support four-wall profitability for franchisees. He succeeded Russell Weiner as CEO, while Weiner is expected to become executive chairman at the company’s annual shareholder meeting in April.

Sales Growth Supported by New Stores and Order Counts

Global retail sales grew 3.2% in the third quarter excluding foreign currency, supported by more than 950 net new stores added over the past 12 months. U.S. retail sales rose 2.1%, driven primarily by net store growth, including 26 net new U.S. locations during the quarter. U.S. same-store sales increased 0.3%.

The U.S. comparable-sales result reflected order-count growth in Domino’s core business and continued growth from aggregator platforms, according to Chief Financial Officer Sandeep Reddy. Those gains were partly offset by a lower average ticket, as items per order declined in carryout and first-party delivery. Pricing rose 1.2% in the quarter.

• U.S. carryout comparable sales increased 1%.
• U.S. delivery comparable sales declined 0.3%.
• International retail sales increased 4.3%, excluding foreign currency.
• International comparable sales increased 0.2%.
• Domino’s added 149 international stores during the quarter.

Reddy said the consumer environment remained difficult and that pressure had become more visible in items per order during the third quarter. Jordan said customers continued to place orders, including lower-income consumers, but were managing their spending by ordering fewer items.

“We’re very pleased to continue to see order count growth, particularly among low-income consumers,” Jordan said. “The brand is still relevant, even when the pressure is on their pocketbooks.”

Value, Product Innovation and Delivery Platforms

Management said it is seeking to balance value promotions that drive order counts with initiatives that improve average ticket size. Jordan said the company’s Best Deal Ever promotion continued to perform well in the third quarter, including the addition of stuffed crust, which Domino’s believes can encourage customers to return for higher-ticket purchases.

The company also recently launched “The Domino,” a product designed around what management calls the “me/we occasion,” or group pizza orders in which consumers still want individual choices. Jordan said the product could help Domino’s compete for occasions that historically may not have favored pizza, particularly on third-party aggregator platforms where consumers may be looking for individual meals.

Domino’s said its third-party delivery rollout continues to add customers without materially displacing its first-party delivery business. Jordan said the company is now the largest pizza brand on both DoorDash and Uber, but believes it has not yet reached its fair share of the broader quick-service pizza category on those platforms.

Management continues to estimate that roughly 50% of third-party delivery sales are incremental. Reddy said the company has intentionally taken a disciplined approach to aggregator expansion to protect franchisee profitability rather than pursuing faster growth at the expense of margins.

Outlook Revised for Store Growth and International Comps

Domino’s maintained its expectation for low-single-digit U.S. same-store sales growth in 2026, but said it now expects results to land toward the lower end of that range, assuming current macroeconomic and competitive pressures persist through year-end.

The company lowered its outlook for U.S. net new stores to 125 to 150 for the year, citing pressure on the development pipeline and franchisee profitability. Reddy said the revision was not driven by closures, which have remained limited, but by a slower pace of future openings. Domino’s has maintained its long-term U.S. potential of more than 8,500 stores.

International same-store sales are now expected to be approximately flat for 2026, largely because of continued pressures at Domino’s Pizza Enterprises, or DPE. Reddy said DPE has indicated that its conditions are not expected to improve meaningfully until 2027. Domino’s continues to expect about 800 net new international stores this year.

For the full year, Domino’s now expects global retail sales growth in the low- to mid-single digits and operating-income growth in the mid-single digits, excluding foreign currency, refranchising gains and the gain from the sale of a corporate aircraft.

Franchisee Profitability and Capital Allocation

Executives acknowledged that franchisee profitability is under pressure, affecting development sentiment and the willingness of operators to open additional stores. Jordan said the company is focused on improving profits through its marketing calendar, better ticket management and more consistent restaurant operations.

He pointed to the company’s Dom.OS technology platform and an orchestration agent being tested in stores as tools intended to improve consistency in product and service. Jordan said he expects improved execution to support customer retention, frequency and franchisee results.

Reddy said supply-chain performance benefited from procurement productivity and route optimization. Domino’s shares U.S. supply-chain profit improvements equally with franchisees, and he said the company’s future focus will be on gross-profit-dollar growth rather than margin expansion alone.

Through the first three quarters of 2026, Domino’s repurchased about 849,000 shares for $305 million. The company had approximately $1.15 billion remaining under its repurchase authorization at quarter-end. Reddy said Domino’s expects to continue returning meaningful cash to shareholders while evaluating leverage levels amid higher interest rates. The company’s leverage was 4.2 times EBITDA at the end of the quarter.

About Domino's Pizza (NASDAQ:DPZ)

Domino's Pizza, Inc is a global quick-service restaurant company specializing in pizza delivery and carryout. Its menu includes a variety of pizzas, sides, desserts and beverages, with orders placed through digital platforms, phone ordering and participating stores.

Founded in 1960 in Ypsilanti, Michigan, Domino's began as a small pizza business and adopted its current name in 1965. The company has expanded through a primarily franchise-based model, supported by company-owned stores and an integrated supply chain that provides food and other products to many participating locations.

Domino's serves customers in the United States and international markets across North America, Europe, Asia-Pacific, the Middle East, Africa and other regions.

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