Domino’s Pizza(DPZ) - 2025 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Income from operations increased by 8.1% for fiscal 2025, excluding foreign currency impacts and refranchising gains [20][21] - Global retail sales grew by 5.4% for the year, driven by positive U.S. and international comps and global net store growth [21] - U.S. same-store sales grew by 3% for the year, with a quarterly increase of 3.7% in Q4 [22][23] Business Line Data and Key Metrics Changes - U.S. carryout comps were up 6.5%, while delivery comps were positive at 1.6% [22] - The company opened 172 net new stores in the U.S. for the full year, bringing the total U.S. store count to 7,186 [23] - International retail sales grew by 5.9% for the year, with same-store sales up 1.9% [24] Market Data and Key Metrics Changes - Domino's gained approximately 11 points of market share over the last 11 years, with a notable gain in 2025 [10] - The pizza category in the U.S. has generally grown at a rate of 1%-2% per year since 2019, with expectations for continued growth [5][35] Company Strategy and Development Direction - The company aims to double its U.S. retail sales over time, leveraging its strong market position and brand strength [8][56] - The "Hungry for MORE" strategy is focused on product innovation, operational excellence, and value promotions to drive growth [11][12] - The company plans to continue expanding its net store growth, targeting 175+ net stores in the U.S. and approximately 800 internationally [26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining growth despite a challenging macro environment, expecting U.S. same-store sales to grow by 3% in 2026 [13][25] - The company highlighted the importance of its franchisee profitability, which is expected to continue growing [20][76] - Management acknowledged pressures from insurance costs but emphasized strong franchisee performance overall [20][75] Other Important Information - The company announced a 15% increase in its quarterly dividend and repurchased approximately 189,000 shares for a total of $80 million in Q4 [24] - The average U.S. franchisee store profitability increased to approximately $166,000, up $4,000 from the previous year [10][23] Q&A Session Summary Question: Concerns about sustaining performance in 2026 - Management emphasized that past initiatives have long-term impacts and that new product innovations will support growth in 2026 [32][33] Question: Contribution from existing initiatives versus new ones - Management indicated that existing initiatives will continue to drive growth, with new initiatives expected to enhance performance [41][45] Question: Delivery business sustainability - Management noted that they are not at their fair share in delivery and expect growth in both delivery and carryout segments [48][50] Question: Performance by income cohorts - Management reported growth across all income cohorts, countering industry trends of lower income declines [64] Question: Changes in technology stack - Management highlighted improvements in e-commerce and store technology, aiming for real-time pizza making and delivery [70][71]