Domino's Pizza delivered strong quarterly results that exceeded Wall Street expectations, with second-quarter revenue rising 4.3% to $1.19 billion, surpassing estimates of $1.18 billion according to reports from Reuters. The Ann Arbor, Michigan-based company's performance was driven primarily by robust growth in its supply-chain business, which offset softer demand at its restaurant locations where cautious consumers curbed discretionary spending. The revenue increase was primarily driven by higher supply chain revenues and higher global franchise royalties and advertising revenues. Shares rose 4.7% in premarket trading as investors responded positively to the earnings beat, though the stock had fallen about 23% this year before the announcement.
CEO Russell Weiner highlighted the company's strong order growth performance, stating that "Domino's drove meaningful order count growth" in the second quarter. As reported by Investing.com, Weiner emphasized that "order growth is the most important driver of long-term success in our business" and noted that the company generated order count growth across both delivery and carryout businesses. This order growth brought millions of new customers to the brand, strengthening Domino's long-term growth flywheel by engaging with their loyalty program while powering supply chain business and driving market share. The pizza chain's scale and competitive position "have never been stronger" according to Weiner, who expressed conviction that Domino's is uniquely positioned to continue gaining market share and delivering long-term value for shareholders.
The company's supply-chain revenue demonstrated exceptional growth, rising 6.5% to $731.7 million during the quarter, as reported by Reuters. This growth was attributed to higher order volumes from stores and a 2.2% increase in food-basket pricing, reflecting modest inflation in ingredients and supplies sold to franchisees. The supply chain gross margin expanded 0.2 percentage points to 12.0% due to procurement productivity, partially offset by higher food basket costs. The pizza chain operates a supply-chain business that manufactures and distributes ingredients, pizza dough and equipment to both franchised and company-owned stores, with revenue increases driven by increased store orders or rising food prices.
Despite the strong order growth, Domino's faced significant headwinds at its restaurant locations. U.S. same-store sales grew just 0.1% for the quarter ended June 14, marking the slowest quarterly showing in more than a year and falling short of analysts' estimates for a 0.62% rise according to CNBC. This represented a substantial decline from 3.4% growth a year ago and the weakest U.S. same-store sales growth in five quarters. The company attributed this weakness to concerns over higher living costs and a sluggish U.S. labor market that discouraged consumers from spending on dining out. International same-store sales, excluding foreign currency effects, declined 0.1%, missing analyst expectations of a 0.5% increase, while a year ago international sales rose 2.4%. Global retail sales growth, excluding foreign currency impact, was 3.0%, showing resilience in international markets despite domestic challenges.
Despite restaurant challenges, Domino's continued its global expansion strategy, adding a net 209 locations worldwide during the quarter - 26 domestic and 183 outside the U.S., lifting its global store count to 22,531. The company's leverage ratio improved to 4.3 times from 4.7 times a year earlier, indicating better financial health. Income from operations increased 3.1% to $232.0 million from $225.0 million in the prior year quarter, while net income rose 3.6% to $135.8 million from $131.1 million in the second quarter of 2025. Excluding a $1.1 million positive impact from foreign currency exchange rates, income from operations rose 2.6%. The company's diluted EPS came in at $4.07, missing analyst expectations of $4.19 per share according to Investing.com, as soft consumer spending weighed on restaurant demand.
