Domino’s Earnings Preview – What To Expect From DPZ

Domino's Pizza Inc. (DPZ) finds itself at a critical juncture as it prepares to unveil its third-quarter earnings report before this morning's opening bell. The stock currently trades at about $411, down 3.7% in the last five days. Beneath the surface lies a more complex narrative of evolving consumer preferences, international challenges, and strategic realignments.

Analysts expect Domino’s to report an average earnings per share (EPS) of $3.97 for the upcoming quarter, down from $4.19 in the same period last year, reflecting a slight decline in profitability. However, revenue is projected to reach $1.14 billion, representing a 5.16% year-over-year increase in sales. This suggests that while earnings may soften, analysts anticipate continued top-line growth driven by steady demand and expansion in digital and delivery channels.

The company's recent financial performance provides further context. In the second quarter of 2025, Domino's reported a 4.3% increase in revenues, driven by higher supply chain revenues and increased U.S. franchise royalties and fees. However, net income decreased by 7.7%, primarily due to unfavorable changes in the company's investment in DPC Dash Ltd. This mixed performance underscores the challenges Domino's faces in balancing revenue growth with profitability.

Domino's international operations present a particularly complex picture. Domino's Pizza Enterprises, the largest master franchise operator outside the U.S., reported its first annual loss in two decades, amounting to A$3.7 million. Weak sales and rising costs in key markets like Japan and France were blamed, leading to the closure of 233 underperforming stores in Japan and 32 in France.

Similarly, Jubilant Foodworks, the operator for Domino's in India, reported a 35% decline in quarterly profits due to increased expenses from higher food costs and rapid store expansion. These international struggles highlight the challenges of maintaining profitability in diverse and competitive markets.

A significant strategic shift for Domino's has been its partnership with third-party delivery apps Uber Eats and Postmates. This move, announced in July 2023, marked the first time Domino's agreed to sell its food through external delivery platforms in the U.S., aiming to reach a broader customer base amid a shrinking delivery business. The stock surged over 16% upon the announcement, reflecting market enthusiasm for this strategic realignment.

While the partnership with third-party delivery services is widely seen as a positive strategic move, a closer examination reveals potential pitfalls. Domino's built its empire on efficient, in-house delivery, controlling the entire customer experience. Outsourcing delivery to Uber Eats and Postmates cedes control over crucial aspects of the service, potentially diluting the brand and impacting customer satisfaction.

Moreover, the fees charged by these platforms could erode profit margins, negating the benefits of increased order volume. While the initial stock surge reflected market optimism, the long-term impact of this shift remains to be seen. It's possible Domino's is sacrificing its core competitive advantage for short-term gains, a gamble that could ultimately backfire.

The company's strategic shifts, international challenges, and mixed financial results create a high degree of uncertainty. Domino's Pizza's stock heads into earnings down 6.13% since the start of 2025, yet is 0.67% higher in the pre-market leading in.