Domino's Dominates Q4, But Can Fast Food Stay Hot in 2025?

The fast-food sector just served up a mixed bag of results for Q4 2024, but one pizza giant is proving it’s still hungry for growth. Let’s break down Domino’s (NASDAQ: DPZ) earnings and why investors should keep an eye on this stock—and its rivals—in the year ahead.

Domino’s: A Solid Quarter Amid Sector Slumps

Domino’s reported Q4 revenue of $1.44 billion, up 2.9% year-over-year but slightly missing estimates. Earnings per share (EPS) came in at $4.89, a 9.2% jump, though the bottom line also fell short. The real story? International dominance. Global retail sales rose 4.4%, driven by a 6.4% surge in international markets. The company added 395 new stores globally, pushing its total to 21,020—a clear sign of expansion confidence.

CEO Russell Weiner emphasized the “Hungry for MORE” strategy, focusing on value menus, optimized delivery partnerships, and carryout growth. While U.S. same-store sales stagnated at 0.4%, the digital sales machine kept humming: 85% of U.S. orders now come through apps or websites.

Investors cheered the long-term vision. Shares jumped 5.5% post-earnings, hitting $487.47, as Domino’s reaffirmed its 2026–2028 goals: 7% annual sales growth and 8% operating profit growth.

Competitors: A Sector Under Pressure

Not all fast-food stocks are sizzling. Let’s compare Domino’s to its peers:

1. Dutch Bros (BROS): The coffee chain smashed expectations with 34.9% revenue growth, but its stock fell 5%. Why? Investors are skeptical about sustaining such rapid expansion.

2. Krispy Kreme (DNUT): Doughnut sales cratered, with revenue down 10.4%. The stock plummeted 52%—a cautionary tale for brands struggling with health trends and competition.

3. McDonald’s (MCD): Flat revenue and missed EPS dragged down results, but shares rose 7%. The golden arches remain a stalwart, though its Q4 E. coli scare (sending U.S. sales down 1.4%) showed no brand is immune to missteps.

4. Restaurant Brands (QSR): Burger King’s parent company saw revenue jump 26%, but EPS missed. Shares dropped 6% as investors worry about margins.

The broader sector is cooling: 14 tracked fast-food stocks averaged an 11.4% drop in 2024, reflecting macroeconomic headwinds and political uncertainty post-Trump’s election win.

Why Domino’s Could Keep Rolling

Domino’s isn’t just surviving—it’s thriving where it counts. Key advantages:
- Global Growth: International sales grew 6.4% in Q4, with 14,352 stores outside the U.S. Emerging markets like India and China are ripe for expansion.
- Tech Edge: Its app-driven model reduces reliance on third-party delivery, cutting costs and boosting margins.
- Dividend Power: A 15% dividend hike to $1.74/share signals confidence in cash flow.

Compare this to rivals: McDonald’s U.S. sales dipped due to safety scares, while Burger King’s 1.5% U.S. growth—while positive—pales next to Domino’s digital prowess.

The Bottom Line: Buy the Dip, But Watch the Sector

Domino’s is a buy for long-term investors, especially if you can catch it on a dip. Its fundamentals—robust international growth, tech-driven efficiency, and a proven dividend—make it a standout in a struggling sector.

But don’t ignore the risks. The Fed’s rate hikes, trade policy shifts, and inflation’s lingering effects could crimp consumer spending. Krispy Kreme’s collapse shows even iconic brands can stumble.

Final Call: Domino’s (DPZ) is a hold for now. Wait for a pullback below $470 to dip into this pizza powerhouse. For the sector overall? Proceed with caution—only the strongest brands will win in 2025.

—Jim’s Bottom Line: When in doubt, bet on the delivery king.

Data Points to Remember:
- Domino’s global store count: 21,020 (up 1.9% YoY).
- International same-store sales growth: 2.7% (Q4), a 31-year streak.
- Digital sales dominance: 85% of U.S. sales via app/website.
- 2024 free cash flow: $512 million, up 5.5% despite macro challenges.

This isn’t just about pizza—it’s about adaptability in a fast-food fight where only the agile survive.