Domino’s Pizza Revenue Rises on Strong Same-Store Sales, But Profit Falls on China Charge

Key Takeaways:

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1. Revenue Growth: Domino’s Q2 revenue rose 4.3% to$1.15 billion, matching Wall Street expectations, driven by same-store sales growth in both the U.S. (+3.4%) and internationally (+2.4%).
2. Earnings Miss: Net profit fell to $131.1 million $3.81/share)* from$142 million $4.03/share) a year ago, missing analyst estimates due to a$27.4 million charge from its China subsidiary (DPC Dash) and higher tax expenses.
3. U.S. Momentum: U.S. sales were boosted by new menu items (stuffed crust), expanded delivery aggregator partnerships, and growth in both delivery and carryout orders, increasing market share.
4. Margin Pressure: Company-owned restaurant margins fell 2% due to higher insurance and food costs, despite higher franchise royalties, advertising, and supply-chain income.
5. Outlook: Management highlighted resilience in international markets despite macro challenges and expects continued growth as new offerings and partnerships roll out.

What Happened?

Domino’s posted higher Q2 revenue on the back of strong same-store sales in the U.S. and abroad, with new menu options and expanded delivery partnerships driving growth. However, profit declined year-over-year, mainly due to a significant charge related to its China operations and increased tax expenses. Margins at company-owned stores were squeezed by rising costs.

Why It Matters?

The results show Domino’s is successfully growing sales and market share despite a challenging macro environment and cost pressures. However, international expansion—especially in China—remains a risk factor, and rising input costs are weighing on profitability.

Investors will be watching how Domino’s manages cost inflation and whether new menu and delivery initiatives can sustain growth and margin recovery.

What’s Next?

Focus will be on further international expansion, cost management, and the impact of new menu items and delivery partnerships on sales and margins. The company’s ability to navigate macro headwinds and improve profitability will be key for future performance.