Dominos Pizza 2025 Q2 Earnings Net Income Declines 7.7% Despite Revenue Growth

Domino's Pizza (DPZ) reported fiscal 2025 Q2 earnings, revealing a 4.3% increase in total revenue to $1.15 billion, compared to the previous year's $1.10 billion. However, the company's net income decreased by 7.7% to $131.09 million from $141.98 million in Q2 2024. The earnings per share (EPS) fell to $3.84 from $4.07, a 5.7% decline. Analysts had anticipated a more robust bottom line, and the decline suggests challenges in effectively translating revenue growth into net income improvements. Domino's guidance remains optimistic, anticipating sustained growth through strategic investments and operational enhancements, though meeting these targets will be crucial.

Revenue

During Q2 2025, Domino's Pizza saw its revenue climb to $1.15 billion, marking a 4.3% increase from the same period in the previous year. This growth was driven by various segments: U.S. company-owned stores generated $92.46 million, U.S. franchise royalties and fees contributed $156.26 million, and the supply chain segment brought in $687.06 million. Moreover, international franchise royalties and fees added $77.16 million, while U.S. franchise advertising revenues reached $132.20 million.

Earnings/Net Income

Domino's Pizza reported a 5.7% decline in EPS to $3.84 for 2025 Q2, down from $4.07 in the same quarter of 2024. The net income also fell by 7.7% to $131.09 million, indicating challenges in maintaining profitability despite revenue growth. The EPS performance reflects a weaker quarter for the company.

Price Action

The stock price of Domino's Pizza experienced a slight decrease of 0.80% during the latest trading day. However, over the past week, it edged up by 0.32%, and month-to-date, it increased by 2.53%.

Post-Earnings Price Action Review

Over the past three years, the strategy of purchasing Domino’s Pizza shares following a quarter of revenue growth, and holding them for 30 days, has delivered moderate returns. This approach yielded a 7.56% return, slightly underperforming the benchmark by 1.85%. Despite this underperformance, the strategy demonstrated reasonable risk-adjusted returns with a Sharpe ratio of 0.48. Notably, it effectively avoided losses during market downturns, as evidenced by a maximum drawdown of 0.00%. These results suggest that while the strategy offers a degree of stability, it may require adjustments to align more closely with benchmark performance.

CEO Commentary

"Our team delivered strong Q2 results," said Russell Weiner, Domino's Chief Executive Officer. He highlighted that international growth continued despite macro challenges, while delivery and carryout in the U.S. contributed to significant market share gains in the pizza QSR category. Weiner emphasized the full rollout on major aggregators, the availability of all crust types, and the company’s best-in-class unit economics. He noted the largest advertising budget, a robust supply chain, and an expanded rewards program as key factors positioning the business well for long-term value creation for franchisees and shareholders.

Guidance

Domino's anticipates continued growth driven by strategic investments and an enhanced operational framework. The company expects to leverage its advertising strength and robust supply chain to sustain its market position. Weiner conveyed confidence in the business's ability to navigate challenges and capitalize on opportunities, asserting that they have the necessary tools to drive long-term value creation.

Additional News

Domino’s Pizza has authorized a new share repurchase program, with $614.3 million remaining for buybacks, signaling strong confidence in its future cash flow generation. This move comes alongside the company’s decision to maintain a quarterly dividend of $1.74 per share, payable on September 30, 2025. The strategic partnership with DoorDash continues to evolve as Domino’s integrates its stores onto the platform, which could enhance its digital footprint and delivery capabilities. In leadership changes, Domino's recently appointed a new Chief Marketing Officer, focusing on strengthening brand presence and digital engagement to drive growth.