Domino’s reveals positive Q3 earnings, analysts disagree

For years, popular pizza chains like Domino’s, Pizza Hut (YUM) Little Caesars (CZR) and Papa John’s (PZZA) they fought to be crowned the best in the world.

These pizza chains have tried almost everything to win more customers, including offering various deals, revamping their recipes, developing new menu items, and even creating marketing to target rival brands.

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Whether it’s taste buds, food preferences, budget or simple nostalgia, everyone has a favorite pizza chain and plenty of reasons to choose it.

However, the numbers don’t lie, and this pizza chain seems to have won the title, rising above all others.

Domino’s is the largest pizza chain in the US, with more than 6,500 locations here and a total of 21,002 stores across the globe as of June 2024. The brands have global retail sales of more than $18.9 billion.

Although Domino’s ranks as the nation’s largest pizza chain thanks to its reported positive year-over-year revenue growth, the company shouldn’t claim victory just yet.

As shown in its latest quarterly report, the company may be quietly struggling: It missed analysts’ expectations in nearly every business area.

Domino’s pizza releases its Q3 2024 earnings report.

Domino’s/TheStreet

Domino’s reports positive third-quarter earnings, but analysts are hungry for more

According to Domino’s (DPZ) Q3 2024 earnings report, total sales were up 5.1% from the previous year, but looking closely at the reported numbers, the results were not as positive as they seemed.

The pizza chain’s international same-store sales posted positive growth, but only 0.8%, a very small increase from analysts’ forecasts of 2.84%.

U.S. same-store sales rose 3 percent, but missed analysts’ expectations of 3.55 percent and reflected slower growth than the 4.8 percent reported in the previous third quarter.

Retail sales at all Domino’s U.S. stores increased 5.1% year-over-year, with company-owned store sales up 3.1% and franchise locations up 3%.

However, none of the US store divisions met analysts’ predictions.

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Domino’s reported total revenue of $1.08 billion, which was below analysts’ expectations of $1.1 billion.

The slower growth reflected in Domino’s earnings can attest to the company’s 0.5% decline in net income, which was attributed to higher income taxes.

However, the company still managed to beat analysts’ estimates of $3.65, reporting EPS of $4.19, which reflected a 0.2% year-over-year increase.

At the market open on Thursday, Domino’s was down 0.79%, but up more than 17% from a year ago.

Domino’s reveals a soft outlook for the coming years

Although Domino’s prioritized presenting its positive numbers, the company warned the public of a challenging macroeconomic environment due to unprecedented business trends.

These business trends have led Domino’s to revise its forecasts and improve its outlook for the next few years.

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For its year-end outlook, Domino’s now expects to grow global retail sales by about 6%, down 1% from its previous estimate, but will maintain its annual operating income growth of 8%.

From 2026 to 2028, Domino’s expects positive annual global retail growth of more than 7% and annual operating income growth of more than 8%.

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