Domino’s Same Store Sales Growth Beats Expectations

Image Source: Domino’s

By Brian Nelson, CFA

On July 21, Domino’s (DPZ) reported mixed second quarter results with revenue beating the consensus forecast but GAAP earnings per share coming in lower than expectations. Revenue increased 4.3% in the quarter due to higher supply chain revenues, higher U.S. franchise royalties and fees and higher U.S. franchise advertising revenues. U.S. same store sales growth was 3.4% in the quarter, beating expectations calling for a 2.2% advance. International same store sales growth was 2.4%, beating expectations calling for a 1.6% increase. Adjusted income from operations increased 14.9% due to higher U.S. franchise royalties and fees, as well as gross margin dollar growth within supply chain.

Management had the following to say about the results:

Our team delivered strong Q2 results. Internationally, we continued to grow despite macro challenges. In the U.S., both delivery and carryout grew, driving meaningful market share gains within the U.S. pizza QSR category. We are now fully rolled out on the two largest aggregators and offer all the major crust types, including stuffed crust. With what we believe are best-in-class unit economics, the largest advertising budget, a robust supply chain, and a rewards program that is bigger than ever, our business is well-positioned. We’ve never had more tools to drive long-term value creation for our franchisees and shareholders.

During the quarter, Domino’s global net store growth was 178, consisting of 30 net store openings in the U.S. and 148 net store openings internationally. Net income in the quarter declined 7.7%, but this was primarily due to an unfavorable charge of $27.4 million associated with the company’s investment in DPC Dash Ltd and a higher effective tax rate. Diluted earnings per share was $3.81 in the second quarter, down from $4.03 in the second quarter of 2024. Net cash provided by operating activities was $366.9 million in the first half of 2025, up from $274.2 million, and free cash flow was $331.7 million in the first half of 2025, compared to $230.5 million in the first half of 2024. We continue to like Domino’s as an idea in the Best Ideas Newsletter portfolio.

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