Domino's Pizza Faces Price Target Cuts After Third-Quarter Results Show Slowing Sales Growth
Domino's Pizza (DPZ) faced a series of price-target reductions from multiple Wall Street brokerages following its third-quarter financial results. Although the pizza chain delivered top- and bottom-line beats, analysts expressed concern over sluggish U.S. same-store sales, which rose just 0.3% compared with 5.2% in the same period last year.
For the quarter, Domino's reported revenue of $1.186 billion, up 3.4% year over year, and diluted earnings per share of $4.60, up from $4.08 a year earlier. Operating income climbed 8.3% to $241.8 million, driven by higher franchise royalties and stronger supply chain margins. However, brokerages noted that transaction volume growth is not translating into strong overall sales gains or significant franchisee profit growth.
Wall Street remains focused on whether U.S. comparable sales can recover to low-single-digit expansion. Analysts expect investors to stay cautious until fourth-quarter operational trends demonstrate a broader business recovery and stable long-term growth.
Key points
- Multiple brokerages lowered price targets for Domino's Pizza following its third-quarter earnings report.
- Third-quarter revenue reached $1.186 billion and diluted earnings per share rose to $4.60, beating market expectations.
- U.S. same-store sales growth slowed dramatically to 0.3%, compared to 5.2% in the prior-year period.
- Net income rose 9.2% year over year to $152.2 million, supported by franchise royalties and supply chain gross margins.
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How we writeDisclaimerQuestions and answers
Why did analysts lower price targets for Domino's Pizza?
Analysts reduced price targets due to slowing U.S. same-store sales growth and limited visibility into franchisee profit recovery, despite higher quarterly earnings.
What were Domino's Pizza third-quarter earnings and revenue?
Domino's reported third-quarter revenue of $1.186 billion and diluted earnings per share of $4.60, both exceeding analyst estimates.
How did Domino's U.S. same-store sales perform in Q3?
U.S. same-store sales grew 0.3% in the third quarter, declining sharply from 5.2% growth recorded in the same period a year earlier.