Domino’s Pizza dropped its Q1 numbers, and the market’s reaction was a 5% pre‑market slide. The quarter had adjusted EPS of $4.13, missing the $4.29 Zacks estimate by 3.7% and down 4.6% from $4.33 last year. Revenue was $1.15B, up 3.5% year over year but 1.4% short of the $1.17B consensus. Supply chain revenues and global franchise royalties drove most of that growth, with supply chain specifically boosted by higher food basket pricing and order volumes despite some unfavorable product mix.
Domino’s Pizza (DPZ)
Financial Score: 98 / 99
Quick Tip
To keep your portfolio strong, stay on top of the financials for each company you hold. Solid companies mean better returns, so be sure to check in on their quarterly and annual numbers.Interesting stocks usually score 80+ on the Financial Scale, with top players hitting 90+. If that score dips below 80, it might be a good time to consider cutting ties before things take a turn.Demand Trends: U.S. Holds, International Softens a Bit
Global retail sales (excluding FX) grew 3.4%, U.S. retail sales up 2.8%, international up 4%. U.S. same‑store sales rose 0.9% (company + franchise), domestic company‑owned comps climbed 1.5% (vs -2.9% last year), domestic franchise comps +0.8% (vs -0.4% prior). International same‑stores dipped 0.4% (vs estimated +1.9%), but the system added 180 net stores—19 U.S., 161 international. That store count push is key because royalties tie directly to franchisee sales.
Margins Expand Despite Cost Pressure
Gross margin widened 60 bps to 40.4%, supply chain gross margin up 60 bps to 12.2% from procurement productivity offsetting higher food costs. Operating income rose 9.6% to $230.4M, or 7.9% excluding $3.6M positive FX on international royalties. The shift toward franchise revenues (no cost of sales) and operating leverage showed up here.
Balance Sheet: Cash Up, Leverage Down, Returns Active
Cash ended at $232.9M (from $125.7M Dec 28), long‑term debt $4.88B (from $4.81B), leverage 4.3x (from 4.9x YoY). Inventory $69.2M (down from $79.2M). Operating cash $162M (vs $179.1M prior), capex $15M, FCF $147M (from $164.4M).
Repurchased 188,304 shares for $75.1M. On April 21, 2026, board added $1B repurchase authorization, total now $1.29B. Quarterly dividend $1.99/share, payable June 30, 2026.
Forward Plan: Store Scale, Digital, Supply Chain Leverage
Domino’s is doubling down on 21,000 global stores by 2028 (from ~20,500), with “Fortress” stores—delivery‑focused units cutting build costs 30% and speeding openings. Digital (already 85% U.S. orders) gets AI for menu personalization, targeting 2-3% annual ticket growth. International is the accelerator, with double‑digit store growth in India/Middle East where per capita pizza is under 1 vs U.S. 10+. Supply chain (~7,000 franchised stores) aims for 14% gross margin long‑term via volumes/pricing. $1.29B buybacks could shrink shares ~2% annually.
Someone’s sitting in the shade today because someone planted a tree a long time ago. ― Warren Buffett.
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