Domino’s Pizza Reports Q3 Operating Income Growth, Cuts 2026 Store Guidance

Domino's Pizza (NASDAQ: DPZ ) held its third-quarter earnings conference call on Tuesday. Below is the complete transcript from the call. This transcript is brought to you APIs. For real-time access to our entire catalog, please visit for a consultation.

S. 2% due to net store growth. The company launched a new product, the Domino, targeting the 'me-we' occasion, aiming to meet individual customer preferences within group orders, and anticipates this will help compete more effectively on aggregator platforms. S.

same-store sales growth expected towards the low end of low single digits, and international same-store sales anticipated to be flat. S. S. potential of 8,500+ stores and global sales growth in the low to mid-single digits.

Management highlighted a focus on improving franchisee profitability, operational consistency, and leveraging new technology to enhance customer experience and operational efficiency. Full Transcript OPERATOR Good day and thank you for standing by. Welcome to the third quarter 2026 Domino's Pizza earnings conference call. At this time, all participants are in a listen-only mode.

After the speaker's presentation, there will be a question-and-answer session. To ask a question during this session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again.

Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Greg Lemencheck. Sir, please go ahead. Greg Lemencheck, Investor Relations Good morning, everyone.

Thank you for joining us today for our third quarter conference call. Today's call will begin with remarks from our Executive Chairman Designate, Russell Weiner, followed by our Chief Executive Officer Joe Jordan and our Chief Financial Officer Sandeep Reddy. We will then open the line for Q&A. Please note that Russell will be joining only for the prepared remarks.

Joe and Sandeep will take your questions. The notices regarding forward-looking statements in this morning's earnings release and 10-Q, both of which are available on our IR website, also apply to our comments on the call today. Actual results or trends could differ materially from our forecasts. For more information, please refer to the risk factors discussed in our filings with the SEC.

In addition, please refer to the 8-K earnings release to find disclosures and reconciliations of non-GAAP financial measures that may be referenced on today's call. This conference call is being webcast and recorded for replay via our website. We want to do our best this morning to accommodate as many of your questions as time permits. As such, we encourage you to ask one question only.

With that, I'd like to turn the call over to Russell. Russell Weiner, Executive Chairman Designate Thanks, Greg, and good morning, everybody. Before we get started, I want to take a moment to say what an incredible privilege it has been to lead this company. I'm so deeply grateful to our franchisees, team members, board and shareholders for the trust and support you've given me over the years.

Serving as CEO has been the honor of a lifetime, and I'm excited to become Executive Chairman at our annual shareholder meeting in April. I also want to thank Dave Brandon, who hired me in 2008 and has been an incredible mentor throughout my career at Domino's. When I joined Domino's, we were a very different company. Since then, we've reinvented the brand, become a technology leader, opened thousands of stores around the world, and built Domino's into the number one pizza company on the planet.

What I'm most proud of, though, isn't what we've accomplished. It's how we've accomplished it, time and again. When others said Domino's couldn't, our franchisees and team members proved we could. That's the Domino's effect.

Always hungry for more, always getting better and never satisfied with where we are today. It's also why I'm so optimistic about our future. Our franchisees and team members — they're our competitive moat. Competitors can try and copy aspects of our products, promotions and technology.

They can't copy the people who make Domino's so special. That's why I have so much confidence in Joe Jordan. I've worked alongside Joe for more than 15 years at Domino's, and there is nobody I trust more to lead the company forward. Joe loves this brand and our franchisees, knows the business inside and out, and firmly believes that our people are our greatest competitive advantage.

Domino's has never been stronger, and I couldn't be more excited about what comes next and the person who's going to lead us there. With that, let me turn it over to our CEO, Joe Jordan. Joe Jordan, Chief Executive Officer Thank you for the kind words, Russell, and good morning, everyone. It is an honor to speak with you today for the first time as CEO of Domino's.

After 15 years with the brand, one thing has become clear to me: when we're firing on all cylinders, we cannot be beat. We have enormous strengths to build on, including a best-in-class franchise system, an iconic brand, an outstanding global business with significant scale and operating capabilities that set us apart. We also have an opportunity to operate as an even more connected global system, moving winning ideas faster across markets and ensuring the entire system benefits from our best thinking. My job isn't to reinvent what makes Domino's great.

It's to accelerate it — with clarity, prioritization, faster decisions and relentless execution. The fundamentals of our category, while mature, remain strong. As consumer expectations evolve, growth will come from understanding those changes, meeting customers where they are and earning more of their occasions more often. As I begin this role, my philosophy is simple: we will build trust through action, earn credibility through results and stay focused on helping our customers, franchisees and stores succeed.

That starts with getting closer to the customer and continuing to drive strong four-wall profitability for our franchisees. Together, they provide a simple lens for how we will prioritize the business. My focus will be on turning our best performance into our everyday performance through stronger execution, continued value leadership and a franchisee-first mindset. Domino's has always been at its best when we are a step ahead.

Our newest innovation, the Domino, is a great example of that mindset in action. It is an ownable product and name that are uniquely Domino's, built around an emerging customer need we call the me-we occasion — the desire to enjoy pizza together without giving up individual choice. That is how we will continue to lead: by anticipating where customers are going and using the unique strengths of our brand to meet them there. Staying a step ahead has helped us set the pace for the industry before, and it's how we'll push ourselves to do it again.

I have tremendous confidence in our people, our franchisees and the foundation we have built, and I believe our next chapter will be our strongest yet. Let me now turn to our third quarter performance. Underlying demand for Domino's remained incredibly strong. We continue to drive order count growth, with orders increasing in both our delivery and carryout businesses.

We also continue to gain share within the QSR pizza category. I believe growing orders is the most important thing a brand can do in the current environment. Consumers remain under pressure, but they continue to choose Domino's. More orders bring more customers into our system, support our franchisees and create opportunities to drive greater frequency over time.

This has been a consistent focus for Domino's, and it will remain one under my leadership. Looking ahead to the remainder of 2026, we expect the macro environment to remain an overhang on the consumer through the balance of the year. However, we have a strong calendar for the fourth quarter and believe we are well positioned to compete. One of the things I am most excited about is the Domino.

The primary insight was that customers wanted to enjoy pizza together without having to compromise. As previously mentioned, we call this the me-we occasion — people ordering as a group while still having the ability to choose something for themselves. Across QSR, consumers increasingly expect individual options even when eating as part of a group. The Domino allows us to meet that need with a product designed for individual choice while still preserving the shared occasion that makes pizza so special.

We also believe this innovation creates an opportunity to compete for more occasions than ever before. That is particularly relevant on aggregator platforms, where customers are often looking for a meal of their own. This product gives them another compelling reason to choose our brand. If you haven't had one yet, I highly recommend that you do.

As I close, having just stepped into the CEO role, I look forward to sharing more of my perspective on Domino's and our long-term opportunities when we report our fourth quarter results early next year. What I can tell you today is that my confidence in the long-term potential of this business is very high. We have an iconic brand, a world-class franchise system, proven operating capabilities and talented people across the globe. My focus is simple: build on those strengths, help our franchisees grow their profits and ensure we're consistently performing at our very best.

We have tremendous opportunities ahead of us, and I believe the future of Domino's is incredibly bright. With that, I'll turn the call over to Sandeep. Sandeep Reddy, Chief Financial Officer Thank you Joe, and once again a huge congratulations to both you and Russell as you step into your new roles. Let's review the results.

S. company-owned store markets. S. and international franchise royalties and fees.

S. order count growth and procurement productivity, excluding the impact of foreign currency. 2% in the quarter. This was due to global net store growth of more than 950 stores over the past 12 months.

S. 3%. Our business continued to be impacted by a challenging macro environment which is pressuring consumers. The comp reflected order count growth in our core business along with continued growth in our aggregator business.

This was partially offset by a lower average ticket. While our ticket trend improved from the second quarter, it was impacted by a sequential decline in items per order in both our carryout and first-party delivery business. We believe this was due to the challenging consumer environment. 3%.

3% excluding the impact of foreign currency in the quarter. This was primarily driven by net store growth over the last year inclusive of 149 stores in Q3. 2%, and they continued to be impacted by Domino's Pizza Enterprises. Our sales were also pressured by macro and geopolitical uncertainty across the world.

Moving to capital allocation, through the first three quarters of the year we have repurchased approximately 849,000 shares for a total of $305 million year to date. 15 billion remaining on our share repurchase authorization. We continue to expect to return meaningful cash to shareholders in 2026 and beyond in line with our capital allocation priorities. 2 times EBITDA based on current market conditions.

That could mean operating below the low end of our targeted leverage range of four times. S. S. comp to be up low single digits, but with three quarters of the year complete we believe it will be towards the low end of that range.

This assumes that the challenging macroeconomic and competitive environment we have experienced year to date continues through the remainder of the year. We now expect our international same store sales growth to be approximately flat for the year due to the continued pressures at DPE, which they have previously announced they do not expect to meaningfully improve until 2027. , reflecting increased pressure on our development pipeline from the macroeconomic environment and year-to-date pressure on franchisee profitability, which we are working to stabilize and return to growth.

Despite this, we continue to have best-in-class franchisee profitability and cash-on-cash returns for our new stores. S. We continue to expect approximately 800 net new stores in our international business. We now expect global retail sales growth in the low to mid single digits for the year reflecting our current year same store sales outlook.

Based on our performance through the third quarter, we currently anticipate finishing towards the midpoint of that range, although our ultimate results will depend heavily on same store sales over the balance of the year. Lastly, reflecting these sales updates, we are now expecting operating income growth in the mid single digits, excluding the impact of foreign currency, refranchising gains, and the gain on the sale of our corporate aircraft. OPERATOR Thank you. As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced.

To withdraw your question, please press star 1. In fairness to all, we ask that you please limit yourselves to one question. Please stand by while we compile our Q&A roster. Our first question is going to come from the line of Chris O'Cull with Baird.

Your line is open. Please go ahead. Chris O'Cull, Analyst at Baird Yeah, thank you, Joe. As you kind of lap last year's Best Deal Ever promotion, how do you think about balancing between keeping value compelling with avoiding the need for increasingly aggressive offers?

Are you seeing these promotions bring back lapsed customers who then return without a deal? Joe Jordan, Chief Executive Officer Yeah, thanks for the question, Chris, and good morning everyone. It is a balance we need to get. We've driven the order counts throughout the year.

We need to balance that with improved ticket growth. Sequentially we did that in Q3 over Q2. We need to do more of that in Q4. That's by getting the right offers to the right consumers at the right time.

Best Deal Ever continued to work hard for us in the third quarter. We continue to evolve that promotion by introducing stuffed crust to it, getting consumers to try one of our most delicious products, and then we do see they come back and purchase that product again, which can help on that ticket side. It's that balance of getting trial of those products, driving some incremental occasions, but then seeing customers come back again at higher tickets. That's our goal.

OPERATOR Thank you. And our next question is going to come from the line of David Palmer with Evercore ISI. Your line is open. Please go ahead.

David Palmer, Analyst at Evercore ISI Great, and thanks for those opening comments. S. delivery channel playing out now that third-party delivery has been fully rolled out and might be fully in the base, so to speak. Do you see delivery growing as a channel going forward, and how do you see the trends perhaps evolving between your own on-site ordering versus what's ordered in third-party sites?

I think there was a dream at one point that this bigger consumer connectivity funnel might ultimately lead to more 1P delivery and growth in that channel over time. Even though it doesn't look like that's happening yet, maybe you think that could happen soon. Thank you. Joe Jordan, Chief Executive Officer Yeah, David, thanks for the question.

I do believe there is continued growth in the delivery channel across both 1P and 3P. So starting with 3P, as we shared on the last call, we believe we're now the number one player on both DoorDash and Uber within pizza. But we are not anywhere near our fair share yet when you compare that to the broader QSR pizza category. So we're still seeing growth there.

We believe we still have growth to go. Very importantly, we continue to measure that incrementality very closely to make sure that we're growing our overall delivery business and not cannibalizing 1P. As we've stated in the past, we believe that to be around 50%. That continues to come in at those levels.

So we'll continue to measure that.