Domino's Pizza (DPZ) posted softer fiscal Q1 trends, with US same-store sales missing expectations as competition intensified and demand weakened, Morgan Stanley said in a report Tuesday.

US same-store sales rose 0.9% in the quarter, missing estimates of 2.3% to 2.6% amid heightened competition, particularly in March, as carryout growth slowed to 2.4% and delivery fell 0.3%, while international same-store sales declined 0.4%, highlighting continued weakness in the global business, the report said.

For 2026, the investment bank now expects US same-store sales growth of 1.3%, down from prior projections, with improvement skewed toward the second half of the year. International same-store sales are projected to grow 1.2%, according to the report.

In response to the headwinds, Domino's updated its full-year guidance for both US and international same-store sales to "low-single digits." The company also signaled a greater sense of "urgency," indicating it may pull forward product innovations planned for later in 2026 to help drive volume for the remainder of the year, the report said.

Morgan Stanley maintained an equal-weight rating on Domino's Pizza and cut its price target to $395 from $430.

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