Warren Buffett Favorite Domino's Sees This as a Big Growth Driver, but Is the Stock a Buy?

Core Insights - Domino's Pizza, despite a decline in U.S. same-store sales, is focusing on international growth and new delivery partnerships to drive future growth [2][3][14] - The company reported a 2.5% increase in overall revenue to $1.11 billion, with global retail sales climbing 4.7$4.46 billion [11] - Domino's plans to open 175 new locations in the U.S. this year and expects similar international store openings as in 2024 [9][14] Financial Performance - U.S. comparable-store sales fell by 0.5%, while company-owned restaurants saw a 2.9% decline [2] - Adjusted EPS increased by 21% to $4.33, surpassing the analyst consensus of$4.03 [13] - The company generated $179.1 million in operating cash flow and$164.4 million in free cash flow during the quarter [13] Growth Strategies - Domino's is expanding its delivery services through partnerships with DoorDash and Uber, expecting significant incremental sales from these collaborations [5][6][17] - The DoorDash partnership is anticipated to contribute to 50% of sales that would not have been captured otherwise, with a national launch planned for May [6][8] - The introduction of the new Parmesan stuffed crust pizza is expected to coincide with the DoorDash launch, enhancing product offerings [8] Market Outlook - The company forecasts U.S. same-store sales growth of around 3% and international growth between 1% and 2% for the upcoming year [14] - Domino's is optimistic about growth in the latter part of the year, driven by the DoorDash partnership, although macroeconomic conditions may pose challenges [14] - The stock is currently trading at a forward P/E ratio of just over 28, indicating a premium valuation typical for heavily franchised quick-service restaurant operators [15][18]