Domino’s Pizza Inc., world’s leading pizza delivery company, in its Q4 earnings call highlighted stronger performance expected in H2 2025 due to new aggregator partnerships, despite missing some 2024 targets. Management defended company’s $162,000 store-level cash flow while emphasizing market share gains and loyalty growth. CEO Russell Weiner stressed the sustainability of their value-driven promotions compared to competitors and maintained DPZ’s $1 billion third-party delivery revenue goal with extended timing. International expansion focuses on China and India despite Australian closures, while operational improvements include new dough technology and e-commerce platform upgrades for 2025. Executives emphasized balancing delivery and carryout businesses while maintaining disciplined pricing.
Domino’s Pizza reported mixed Q4 results with annual US retail sales growth of 5.3% despite economic challenges, though Q4 US same-store sales grew just 0.4%, missing analyst projections. The company posted EPS and revenue growth below analyst expectations and forecast. While carryout business increased over 6% annually, delivery declined 1.4% in Q4. International same-store sales rose 2.7%, continuing a 31-year growth streak with strength in India and Canada. Domino’s expanded with 84 new US stores in Q4, reaching 7,014 and 364 net new stores globally, contributing to 775 new locations for fiscal 2024. The company maintained its 99% franchise model while increasing digital sales (85% of US sales), including 3% through Uber partnerships. However, challenges persist with franchisee profitability of $162,000 in 2024, missing US targets, and conservative international growth projections of 1-2% for 2025 due to economic pressures and Australian store closures.
Continue Reading: Unearth the Vital Insights from Domino’s Pizza Inc.’s Earnings Call!
Financial/Operational Metrics:
- Revenue: $1.44 billion, up 3% YoY.
- Net Income: $169.4 million, up 8% YoY.
- Diluted EPS: $4.89, up 9% YoY.
- Operating Income: $273.7 million, up 6% YoY.
- U.S. Same Store Sales Growth: up 0.4% vs. up 2.8% in 4Q23.
- International Same Store Sales Growth: up 2.7% vs. up 0.1% in 4Q23.
Outlook:
- 2025 U.S. Same-Store Sales Target: 3% plus growth.
- Net New Stores: 175 plus in the U.S.
- International Growth Forecast: 1-2% same-store sales growth before normalizing in 2026.
- Cheese Prices: Anticipated cost increases in H1 2025.
Analyst Crossfire:
- U.S. Same-Store Sales Growth Timing & International Sales Growth Outlook (Dennis Geiger – UBS, Brian Bittner – Oppenheimer): Aggregator partnerships and marketing initiatives will drive stronger performance in the second half of 2025. New promotions, such as the $9.99 Any Best Deal Ever, stem from the Hungry for MORE strategy. While Q4 international comps were better than expected, macroeconomic volatility keeps the 2025 outlook conservative at 1-2% same-store sales growth. Key strategies include price positioning, aggregator expansion, and carryout/dine-in growth (Sandeep Reddy – CFO, Russell J. Weiner – CEO).
- $10 Price Point Strategy & Long-Term Same-Store Sales Drivers (John Ivankoe – J.P. Morgan, David Palmer – Evercore ISI): Domino’s ability to sustain value pricing like $9.99 large unlimited toppings comes from scale advantages in supply chain and marketing. The strategy is sustainable, unlike competitors struggling with similar promotions. Beyond aggregator expansion and stuffed crust potential, Domino’s sees loyalty and market share gains as multi-year growth levers. The flywheel effect from loyalty members and digital engagement will drive sustainable sales (Russell J. Weiner – CEO, Sandeep Reddy – CFO).
- Aggregator Expansion Impact, Franchisee Profitability & Market Share (Peter Saleh – BTIG, Andrew Charles – TD Cowen): Domino’s remains bullish on a $1B incremental sales opportunity, though reaching this target may take longer. Marketing optimization and faster tech integration will improve performance as new partnerships launch. U.S. store-level cash flow fell short of the $170K target due to Q4 macro pressures and food cost inflation. Despite this, franchisees support value promotions like the $9.99 Best Deal Ever, reflecting confidence in long-term gains (Sandeep Reddy – CFO, Russell J. Weiner – CEO).
- International Unit Growth & DPE Closures, New E-Commerce Platform (Jon Tower – Citi, Chris O’Cull – Stifel): Despite 200 store closures by DPE (Australia) in 2025, strong unit growth in China (300-350 stores planned) and India will drive reacceleration in 2026. Store economics and paybacks remain strong outside DPE. The new website and app will enhance food visuals, simplify user flows, and better support carryout orders. The rollout is gradual to optimize conversion rates before full deployment in 2025 (Russell J. Weiner – CEO, Sandeep Reddy – CFO).
- Stuffed Crust & New Product Launches, Consumer Spending Trends & QSR Dynamics (Lauren Silberman – Deutsche Bank, Jeffrey Farmer – Gordon Haskett): While not confirming stuffed crust, Domino’s aims for long-term product ROI rather than short-term LTOs. At least two new products are planned for 2025, already factored into the 3% same-store sales guidance. While low-income consumers remain pressured, a new “up-switching” trend is emerging, where some consumers opt for pricier casual dining options instead of QSR due to narrowing price gaps (Russell J. Weiner – CEO, Sandeep Reddy – CFO).
The post DPZ Q4 Call Highlights: New Dough Tech, Franchisee Profitability and Global Growth! first appeared on AlphaStreet.
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