Domino’s Fourth Quarter Earnings Preview: Investor Expectations and Growth Strategies

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Wall Street Eyes Domino’s Performance Amid Franchise Challenges

Domino’s Pizza (DPZ) is set to announce its fourth-quarter earnings, with investors and analysts closely monitoring the company’s financial performance and expansion strategies. Wall Street anticipates revenue of approximately $1.48 billion, reflecting a modest year-over-year increase, while adjusted earnings per share are expected to rise to $4.93, up from $4.48 in the same period last year.

Despite the severe winter weather that impacted delivery operations, Citi analyst Jon Tower noted that investors have already factored in a weak quarter and are focusing on the long-term growth trajectory. Domino’s shares have gained over 12% year-to-date, outperforming the S&P 500's 5% gain. However, the stock's one-year performance of 13% still trails the 23% jump in the broader market index.

Domino’s previously projected 6% annual global retail sales growth for 2024, but concerns remain regarding its international franchise network, particularly the performance of Domino’s Pizza Enterprises (DPE). The largest franchisee is expected to close 205 underperforming locations, primarily in Japan, raising questions about future expansion. Stifel analyst Chris O’Cull estimates that these closures could negatively impact global net unit growth by approximately 100 basis points in 2025.

Wall Street Projections for Domino’s Q4 and 2024 Earnings

For the fourth quarter, analysts predict:

  • Adjusted EPS: $4.93 (vs. $4.48 YoY)
  • Revenue: $1.48 billion (vs. $1.40 billion YoY)
  • US same-store sales growth: 1.72% (vs. 2.80%)
    • Company-owned locations: 1.79% (vs. 5.90%)
    • Franchise locations: 1.74% (vs. 2.60%)
  • International same-store sales growth: 1.63% (vs. 0.10%)

For the full-year 2024 financial results, expectations include:

  • Adjusted EPS: $16.70 (vs. $14.66)
  • Revenue: $4.74 billion (vs. $4.48 billion)
  • US same-store sales growth: 3.63% (vs. 1.60%)
    • Company-owned locations: 4.30% (vs. 5.40%)
    • Franchise locations: 3.63% (vs. 1.40%)
  • International same-store sales growth: 1.37% (vs. 1.70%)

Growth Drivers: Third-Party Delivery Expansion and Menu Innovation

Domino’s has been leveraging third-party delivery services, with a goal of achieving 3% incremental US sales through its Uber Eats partnership. CEO Russell Weiner emphasized that platforms like Uber Eats and DoorDash attract high-income customers, which could provide an additional revenue stream.

In Q1 2025, Domino’s exclusivity deal with Uber will expire, enabling it to expand onto DoorDash, the largest food delivery platform in the US. Weiner highlighted that listing on multiple delivery apps could unlock a $1 billion revenue opportunity, potentially driving higher same-store sales growth.

In addition to delivery expansion, Domino’s is banking on menu innovation to maintain consumer interest. Deutsche Bank analyst Lauren Silberman noted that a new stuffed crust pizza launch, expected in the second half of 2025, could generate significant sales momentum. Other strategies include loyalty program enhancements, mobile app and website improvements, and value meal promotions to attract budget-conscious consumers.

Warren Buffett’s Investment Signals Confidence in Domino’s Future

Adding to investor optimism, Berkshire Hathaway (BRK-B), led by Warren Buffett, disclosed a stake in Domino’s, holding 2.38 million shares as of late 2024. This makes Berkshire the fourth-largest shareholder of the pizza chain.

The investment, alongside Berkshire’s new position in Constellation Brands (STZ), was seen by CFRA analyst Garrett Nelson as a major vote of confidence in Domino’s long-term growth potential. The backing from one of the world’s most renowned investors could further boost sentiment around the stock.

As Domino’s prepares to report earnings, all eyes are on how well it navigates franchise closures, third-party delivery integration, and product innovation to sustain long-term growth in a competitive fast-food landscape.

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