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By Brian Nelson, CFA
Domino’s Pizza (DPZ) recently reported fourth quarter results that were mixed. Revenue of $1.54 billion was up 6.4% and beat estimates but GAAP earnings per share came in a bit light relative to forecasts. U.S. same store sales growth was 3.7% for the fourth quarter, better than the 3.25% consensus estimate, while international same store sales growth was 0.7% for the period. Global net store growth was 392 for the fourth quarter, helping to drive income from operations 7.3% higher, after adjusting for currency impacts. The board approved a ~15% increase in its quarterly dividend to $1.99 per share, with Domino’s now sporting a 2.2% estimated forward dividend yield.
Management had the following to say about the results:
In 2025 we demonstrated that when we execute our Hungry for MORE strategy it delivers MORE sales, MORE stores, and MORE profits. In our international business, we delivered a remarkable 32nd consecutive year of same store sales growth. In our U.S. business, we gained another point of market share, pacing well ahead of the QSR Pizza category, which grew again in 2025. These strong results flowed through to increased franchisee profits, showcasing our ability to drive store level profitability while providing incredible value for our customers. As we look ahead to 2026, it is our expectation that we will meaningfully increase our market share within a U.S. QSR pizza category that continues to grow. Our value and scale advantages will remain a differentiator, while our new brand campaign and e-commerce site will drive deliciousness and improved experiences. Domino’s has always been in the business of creating its own tailwinds and driving growth. That has been and will continue to be how we drive best in class results and long-term value creation for our franchisees and shareholders.
Higher supply chain revenues, U.S. franchise advertising revenues and U.S. franchise royalties and fees helped to drive the strong revenue growth in the quarter, and the company was able to offset higher insurance costs, higher labor rates and increased food basket pricing to drive strong operating income growth. Net income increased 7.2% in the fourth quarter of 2025, while diluted earnings per share was $5.35 in the fourth quarter of 2025 compared to $4.89 in the fourth quarter of 2024, a 9.4% increase.
For 2025, operating cash flow was $792.1 million, while free cash flow was $671.5 million for the year. During 2025, Domino’s repurchased 785,280 shares of common stock for a total of $354.7 million. It still has $459.7 million authorized for future share repurchases. Domino’s leverage ratio fell to 4.4x from 4.9x at the end of 2024. Global retail sales are expected to expand 6% in 2026 on U.S. same store sales growth of 3% on the year, and management believes it can double its retail sales from where they are today. We continue to like the largest pizza company in the world and its mostly franchised business model. Domino’s remains a key idea in the portfolio of the Best Ideas Newsletter.
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Brian Nelson owns shares in SPY, SCHG, QQQ, QQQM, DIA, VOT, RSP, and IWM. Valuentum owns SPY, SCHG, QQQ, QQQM, VOO, and DIA. Brian Nelson’s household owns shares in HON, DIS, HAS, NKE, DIA, RSP, SCHG, QQQ, QQQM, and VOO. Some of the other securities written about in this article may be included in Valuentum’s simulated newsletter portfolios. Contact Valuentum for more information about its editorial policies.
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