Domino’s Pizza stock rises on strong US and international sales

Investing.com - Domino’s Pizza (NASDAQ:DPZ), the $16 billion market cap pizza chain with a GOOD financial health rating according to InvestingPro, reported better-than-expected same-store sales growth in both U.S. and international markets, according to a research note from Citi.

The pizza chain posted 3.5% U.S. comparable sales growth, significantly outperforming both Citi and Wall Street expectations of 1.5% and 1.7%, respectively. The U.S. performance reached the high end of investor expectations.

International same-store sales also exceeded forecasts, growing 2.4% compared to Citi’s projection of 0.5% and the Street’s estimate of 1.9%. Unit growth was generally in line with expectations.

Despite the sales beat, company margins declined 200 basis points year-over-year, raising questions about the cost impact of third-party delivery services and promotional activities on company and franchisee profit and loss statements.

Citi maintained its Neutral rating and $500 price target on Domino’s Pizza, which currently trades at a P/E ratio of 26.66, noting that the company is keeping its 2026 plans for innovation, promotions, and advertising confidential, which may not reassure skeptics about the company’s strategy beyond its DoorDash (NASDAQ:DASH) partnership rollout.

In other recent news, Domino’s Pizza has been the focus of various analyst ratings and projections as it approaches its second-quarter 2025 earnings report. Loop Capital maintained its Buy rating, noting that Domino’s same-store sales growth exceeded expectations in the fiscal second quarter, with a reported increase of approximately 2.5%. UBS also reiterated a Buy rating, with expectations for strengthening U.S. same-store sales momentum supported by new store growth and sales initiatives. Morgan Stanley (NYSE:MS) raised its price target to $514, citing solid outlooks for same-store sales and successful marketing initiatives, including the partnership with DoorDash and the introduction of stuffed crust pizza.

BMO Capital reiterated its Outperform rating, expecting Domino’s to deliver results that meet or exceed expectations, driven by accelerating U.S. comparable sales and market share gains. Melius Research initiated coverage with a Hold rating, acknowledging Domino’s competitive advantages but expressing concerns about limited near-term upside due to current stock price levels. Despite varying ratings, analysts generally anticipate Domino’s will largely maintain its 2025 guidance, focusing on U.S. sales trends and potential global retail sales growth. Investor attention remains on the company’s performance in the second half of 2025, with debates about future growth prospects and sales initiatives continuing.

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