• Income from Operations: Increased 1.4% in Q1, excluding foreign currency impact.
• Global Retail Sales Growth: 4.7% increase, excluding foreign currency impact.
• US Retail Sales Growth: 1.3% increase, driven by net store growth.
• Same-Store Sales: Declined 0.5% in the US.
• Carry-Out Business Comps: Up 1%.
• Delivery Business Comps: Down 1.5%.
• US Store Count: Added 17 net new stores, totaling 7,031.
• International Retail Sales Growth: 8.2% increase, excluding foreign currency impact.
• International Same-Store Sales: Increased 3.7%.
• Net Store Changes: Decrease of 25 stores internationally, primarily due to closures in Japan.
• Share Repurchase: Approximately 115,000 shares repurchased at an average price of $434, totaling $50 million.
• Share Repurchase Authorization Remaining: $764 million.

• Warning! GuruFocus has detected 4 Warning Signs with KRKNF.

Release Date: April 28, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Domino's Pizza Inc (NASDAQ:DPZ) achieved market share gains in both US and international markets despite consumer and industry headwinds.
• The launch of the Parmesan Stuffed Crust Pizza has been well-received, with high customer satisfaction scores and a strong mix of orders.
• The partnership with DoorDash is expected to significantly enhance delivery capabilities and is anticipated to be approximately 50% incremental.
• Domino's Pizza Inc (NASDAQ:DPZ) continues to drive renowned value through national promotions and rewards programs, which have been effective in a challenging economic environment.
• The company has made strategic organizational changes to improve efficiency and align with its Hungry for MORE strategy, which is expected to drive long-term growth.

Negative Points

• Same-store sales in the US declined by 0.5%, slightly below expectations, due to negative traffic and a decline in delivery business.
• The delivery business continues to be impacted by macroeconomic pressures affecting low-income consumers.
• Net store growth in the US was modest, with only 17 net new stores added in the first quarter.
• International net store count decreased by 25 due to closures by Domino's Pizza Enterprises, primarily in Japan.
• The company faces potential geopolitical pressures that could impact international sales and growth.

Q & A Highlights

Q: Can you comment on the potential international geopolitical pressure impacting Domino's? Are there any signs of consumer weakness or boycotts against US brands? A: Sandeep Reddy, CFO, explained that the geopolitical pressure is more about the volatility in recent months. This could potentially impact demand, which is factored into their guidance of 1% to 2% international sales growth for the year.

Q: What is the expected impact of the DoorDash partnership on sales, and how does it compare to Uber Eats? A: Russell Weiner, CEO, stated that DoorDash's pizza sales are about twice that of Uber Eats. They expect DoorDash to contribute significantly in the second half of the year, with an anticipated 50% incrementality from third-party platforms.

Q: How is the stuffed crust pizza platform performing, and what impact is it having on sales? A: Russell Weiner, CEO, noted that the stuffed crust pizza was launched late in Q1, so it didn't significantly impact that quarter. However, customer feedback has been positive, and the product is meeting expectations. It represents a significant opportunity as it fills a gap in their pizza portfolio.

Q: Can you elaborate on the initiatives to achieve the 3% US comp guidance, including the role of loyalty programs and new products? A: Russell Weiner, CEO, emphasized their strategy of launching two new products annually and maintaining value through promotions. The loyalty program is a multi-year driver, focusing on carry-out customers and increasing frequency among light users.

Q: What is the outlook for domestic unit growth, and are there any concerns about tariffs affecting construction costs? A: Sandeep Reddy, CFO, confirmed the guidance of 175 net new stores in 2025, stating that franchisee economics are strong, and the pipeline is robust. Tariffs are not expected to materially impact demand or growth.

Q: How are customers on aggregator platforms like Uber Eats and DoorDash behaving compared to other channels? A: Russell Weiner, CEO, observed that customers on aggregator platforms tend to order for smaller groups and are promotionally sensitive. The best deals remain on Domino's own platform.

Q: How did the "Best Deal Ever" promotion impact sales trends, and what was the strategy behind it? A: Russell Weiner, CEO, explained that the promotion was designed to offer value without limitations on crust or toppings, addressing customer desires for fair pricing. The promotion was well-received, and franchisees supported it, demonstrating confidence in Domino's analytics and profitability.

Q: What are the expectations for international unit growth, especially after the DPE closures? A: Sandeep Reddy, CFO, stated that the DPE closures in Japan were expected and are mostly behind them. Strong trends continue in India and China, and they expect international unit growth to align with previous expectations.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.