Domino's Pizza Drops 9% in the Past Month: Buy Now or Wait?

Domino's Pizza's DPZ shares have declined 8.5% over the past month compared with the Zacks Retail – Restaurants industry’s 4% fall. However, the stock has underperformed the Zacks Retail-Wholesale sector and the S&P 500’s growth of 1.8% and 4.9%, respectively, during the same timeframe.

The downside was primarily attributed to a challenging macroeconomic environment and elevated cost pressures.

Despite the recent stock price decline, Domino’s Pizza continues to be supported by multiple growth drivers. The company’s “Hungry for MORE” strategy remains central to delivering stronger sales and profitability. Also, emphasis on initiatives such as menu innovations, an enhanced Rewards program, international expansion and ongoing strategic advancements bode well. At the same time, rising guest satisfaction has reinforced customer loyalty. Collectively, these factors act as tailwinds, positioning the company for long-term growth.

Let’s delve deeper and see what may bring the stock back on track.

Factors That May Help With the Growth of DPZ Stock

Brand Image & Franchising Strategy: Domino’s Pizza is the fastest-growing segment in the United States and one of the largest pizza chains globally. Its vast franchise network, which management frequently refers to as the "secret sauce" of its success, continues to bolster brand strength.

Franchisees play a critical role in driving operational excellence, customer satisfaction and market share growth. In the fiscal second quarter, the company refranchised 36 company-owned stores in Maryland to a seasoned operator with over 20 years of experience within the Domino’s Pizza network. Management remains confident that its franchise-driven model and market share-focused strategy will likely generate long-term value for both its operators and shareholders.

International Expansion Efforts: Domino’s Pizza continues to advance its global growth strategy through steady new unit development. In the second quarter of 2025, international retail sales increased 6% year over year, supported by strong same-store sales and the addition of new locations. During the quarter, the U.S. system also expanded with 30 net new stores, bringing the domestic store count to 7,061. Looking ahead, Domino’s Pizza expects significant international momentum, with franchise partners planning approximately 250 new store openings in India and around 300 in China for the current fiscal year. These expansion plans underscore the strength of Domino’s brand and its franchisee network in high-growth markets.
 
Focus on Menu Innovation: Domino’s Pizza continues to advance its long-term growth strategy through continuous menu innovation. The company’s strong performance in the fiscal second quarter reflects the success of its “Hungry for MORE” strategy, a comprehensive framework aimed at driving sustained sales, expanding store presence and enhancing profitability. 

Notably, the launch of the Parmesan Stuffed Crust has emerged as a standout success, significantly contributing to increased customer traffic and higher average ticket values. Given the solid customer feedback, the company is optimistic and anticipates it to be a long-term driver of mix and customer retention.

Digital Initiatives to Boost Revenues: Domino’s Pizza is leveraging digital capabilities to drive revenue growth and strengthen customer engagement. The company has implemented a range of enhancements across ordering, service selection, payment and tipping to elevate the overall consumer experience. It continues to innovate aggressively across its operations to streamline service, increase efficiency and support sustained sales growth.

Conclusion

While Domino’s Pizza has faced short-term headwinds from macroeconomic pressures and cost challenges, its long-term growth story remains intact. The company’s franchise-driven model, robust international expansion, consistent menu innovation and digital advancements continue to reinforce its competitive positioning. With resilient customer loyalty, a Zacks Rank #2 (Buy) and a strong VGM Score of B, Domino’s Pizza looks well-positioned for a rebound. The recent pullback offers investors an attractive entry point to accumulate shares ahead of potential upside.

Other Key Picks

Other top-ranked stocks from the Zacks Retail-Wholesale sector are Build-A-Bear Workshop, Inc. BBW, Groupon, Inc. GRPN and BJ's Restaurants, Inc. BJRI.

Build-A-Bear Workshop presently sports a Zacks Rank #1 (Strong Buy). The company delivered a trailing four-quarter earnings surprise of 21.3%, on average. BBW stock has jumped 55.9% year to date. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for BBW’s 2025 sales and earnings per share (EPS) indicates growth of 7.4% and 6.9%, respectively, from the year-ago period’s levels.

Groupon sports a Zacks Rank of 1 at present. The company delivered a trailing four-quarter earnings surprise of 230.5%, on average. Groupon's stock has jumped 87.7% year to date.

The Zacks Consensus Estimate for Groupon’s 2025 sales and EPS indicates growth of 2.4% and 153%, respectively, from the prior-year levels.

BJ's Restaurants flaunts a Zacks Rank of 1 at present. The company delivered a trailing four-quarter negative earnings surprise of 102.7%, on average. BJ's Restaurants' stock has declined 14.3% year to date.

The Zacks Consensus Estimate for BJ's Restaurants’ 2025 sales indicates a decline of 3.3%, while EPS indicates growth of 43.5% from the prior-year levels.

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This article originally published on Zacks Investment Research (zacks.com).

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