It has been about a month since the last earnings report for Domino's Pizza (DPZ). Shares have lost about 3.3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Domino's Pizza due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the latest earnings report in order to get a better handle on the important catalysts.
Domino's Q3 Earnings & Revenues Beat Estimates
Domino's reported third-quarter fiscal 2025 results with earnings and revenues beating the Zacks Consensus Estimate. The top line increased year over year, while the bottom line fell from the prior-year quarter’s figure.
In the fiscal third quarter, Domino’s achieved positive order growth in the United States, supported by the success of its “Best Deal Ever” promotion and innovation around stuffed-crust pizza. These initiatives fueled strong momentum across both delivery and carryout channels. Management emphasized that the company’s strategic consistency and execution excellence position it to capture additional QSR pizza market share globally in 2025 and beyond, while expanding long-term value for franchisees and shareholders.
DPZ's Q3 Earnings & Revenue Discussion
In the quarter under discussion, Domino's reported adjusted earnings per share (EPS) of $4.08, beating the Zacks Consensus Estimate of $3.99. The bottom line declined 2.6% from $4.19 reported in the year-ago quarter.
Revenues of $1,147.1 million beat the consensus mark of $1,139 million. Moreover, the top line increased 6.2% on a year-over-year basis. This upside is driven by strong contributions from U.S. franchise royalties and fees and higher supply-chain revenues.
In third-quarter fiscal 2025, Domino's had 214 net store openings.
DPZ’s Other Metrics
Global retail sales (excluding foreign currency impact) rose 6.3% on a year-over-year basis. This upside was driven by a year-over-year increase in international (5.7%) and U.S. store sales (7%).
Comps at Domino’s domestic stores (including company-owned and franchise stores) rose 5.2% year over year. We estimated the metric to increase 6.4% year over year.
At domestic company-owned stores, Domino’s comps increased 3.4% compared with the 3.1% rise reported a year ago. We estimated the metric to increase 5.1% year over year.
Domestic franchise store comps rose 5.3% compared with a 3% increase reported in the prior-year quarter. We estimated the metric to increase 6.5% year over year.
Comps at international stores, excluding foreign currency translation, rose 1.7% compared with a 0.8% improvement reported in the prior-year quarter. We estimated the metric to increase 1% year over year.
DPZ’s Q3 Margins
In the fiscal third quarter, Domino’s gross margin expanded 90 basis points (bps) year over year to 40.1%. However, the U.S. company-owned store gross margin contracted 50 bps year over year to 16.3%. This downside can be attributed to the increase in the company’s food basket pricing to stores and higher wage costs. However, this was partially offset by higher sales leverage.
Balance Sheet of DPZ
As of Sept. 7, 2025, cash and cash equivalents totaled $139.7 million compared with $186.1 million as of Dec. 29, 2024. Long-term debt (less current portion) at the end of the fiscal third quarter totaled $4.81 billion compared with $3.83 billion reported in the previous quarter. Inventory amounted to $71.2 million compared with $70.9 million as of Dec. 31, 2024.
Capital expenditure at the end of the fiscal third quarter totaled $56.7 million, down from $70.8 million reported in the prior-year quarter.
During the reported quarter, the company repurchased 165,778 shares for an aggregated cost of $74.7 million. As of Sept. 7, 2025, DPZ stated the availability of $539.7 million under its repurchase program.
Management declared a cash dividend of $1.74 per share. The dividend will be paid on Dec. 26, 2025, to its shareholders of record as of Dec. 15.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
VGM Scores
At this time, Domino's Pizza has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a score of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Interestingly, Domino's Pizza has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Domino's Pizza Inc (DPZ): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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