Fast-food pizza chain Domino’s (NYSE:DPZ) reported Q3 CY2025 results topping the market’s revenue expectations, with sales up 6.2% year on year to $1.15 billion. Its GAAP profit of $4.08 per share was 3.1% above analysts’ consensus estimates.
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Domino's (DPZ) Q3 CY2025 Highlights:
- Revenue: $1.15 billion vs analyst estimates of $1.14 billion (6.2% year-on-year growth, 0.9% beat)
- EPS (GAAP): $4.08 vs analyst estimates of $3.96 (3.1% beat)
- Adjusted EBITDA: $243.6 million vs analyst estimates of $235.5 million (21.2% margin, 3.4% beat)
- Operating Margin: 19.5%, up from 18.4% in the same quarter last year
- Locations: 21,750 at quarter end, up from 21,002 in the same quarter last year
- Same-Store Sales rose 3.4% year on year (1.9% in the same quarter last year)
- Market Capitalization: $14.4 billion
StockStory’s Take
Domino’s third quarter saw a positive market reaction, driven by strong U.S. sales momentum and improved profitability. Management credited growth to its “Best Deal Ever” promotion, expanded value offerings, and operational improvements that supported both carryout and delivery channels. CEO Russell Weiner emphasized that the company’s ability to execute complex promotions and successfully launch new menu items, like Parmesan stuffed crust pizza, contributed to higher order counts and meaningful market share gains.
Looking ahead, Domino’s expects ongoing sales growth through new digital platform enhancements, continued aggregator partnerships, and a brand refresh aimed at increasing consumer engagement. Management highlighted the compounding impact of its DoorDash partnership and loyalty program, with CFO Sandeep Reddy noting that “initiatives such as our renowned value strategy and expanded aggregator presence should continue to drive comps, even amid a challenging macro environment.”
Key Insights from Management’s Remarks
Management linked the quarter’s performance to successful promotions, digital upgrades, and ongoing international expansion, while noting that macroeconomic pressures remain a watchpoint for the industry.
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Promotions drove U.S. growth: The “Best Deal Ever” campaign and value-focused initiatives attracted new and repeat customers, supporting higher transaction counts and benefiting franchisee profitability. Management noted that franchisees requested an extension of the promotion due to its success.
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Menu innovation supported sales: The Parmesan stuffed crust pizza launch met expectations for product mix and customer acquisition, while new bread bites flavors refreshed a legacy menu platform and simplified operations by retiring more complex items.
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Loyalty and digital upgrades: Upgrades to the ecommerce website and mobile experience improved customer conversion rates, while the loyalty program continued to drive both order frequency and customer retention, especially in the carryout segment.
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Aggregator roll-out broadened reach: The full launch on DoorDash expanded Domino’s delivery reach, with early results showing incremental sales and differentiated customer demographics compared to Uber Eats. Management expects sustained growth from aggregators as awareness builds.
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International and store expansion: Net store growth continued in both the U.S. and international markets, with particular strength in Asia, notably India and China. Management remains focused on long-term unit growth, despite some regional pressures and market-specific challenges.
Drivers of Future Performance
Domino’s outlook for the coming quarters hinges on maintaining sales momentum through promotions, technology upgrades, and a balanced approach to delivery and carryout growth.
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Macro headwinds persist: Management cautioned that ongoing economic uncertainty could pressure same-store sales, particularly if restaurant industry traffic slows further. However, they expect to continue gaining market share relative to competitors.
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Aggregator partnerships expand: DoorDash and Uber Eats are expected to provide a multi-year tailwind, with management highlighting additional room for growth as Domino’s aims to match its off-platform delivery share on aggregator platforms.
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Unit and international growth focus: Domino’s plans to add at least 175 net new U.S. stores annually, with international expansion targets centered on high-growth markets like China and India. The company is monitoring franchisee economics and market conditions to ensure sustained store development.
Catalysts in Upcoming Quarters
In future quarters, the StockStory team will be watching (1) the continued performance and consumer response to Domino’s brand refresh and digital upgrades, (2) the build-out and incremental sales impact of aggregator partnerships, and (3) the pace of U.S. and international store openings. The effectiveness of new menu offerings and the ability to sustain promotions without eroding margins will also be key indicators of execution.
Domino's currently trades at $424.25, up from $408.33 just before the earnings. Is there an opportunity in the stock?Find out in our full research report (it’s free for active Edge members).
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