Loop Capital has adjusted its price target for Domino's Pizza (DPZ, Financial), increasing it from $564 to $574 while maintaining a Buy rating on the shares. This decision comes following a notable 3.4% rise in U.S. franchised same-store sales during the second quarter, which surpassed market expectations. The positive sales performance has reinforced Loop Capital's optimistic outlook on the stock's future potential.
DPZ Key Business Developments
Release Date: July 21, 2025
- Income from Operations: Increased 14.9% in Q2, excluding foreign currency impact.
- Global Retail Sales Growth: 5.6% in Q2, excluding foreign currency impact.
- US Retail Sales Growth: 5.1% in Q2, driven by same-store sales and net store growth.
- Same-Store Sales Growth: 3.4% in the US for Q2.
- Carryout Comps: Increased 5.8% in Q2.
- Delivery Growth: Positive 1.5% in Q2.
- Net New Stores in the US: Added 30, bringing the total to 7,061.
- International Retail Sales Growth: 6% in Q2, excluding foreign currency impact.
- International Same-Store Sales Growth: 2.4% in Q2.
- Net Store Growth Internationally: 148 new stores in Q2.
- Share Repurchase: Approximately 316,000 shares repurchased at an average price of $475, totaling $150 million.
- Refranchising Gain: $3.9 million pre-tax gain from refranchising 36 company-owned stores.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Domino's Pizza Inc (DPZ, Financial) reported strong results in the second quarter, with positive growth in both delivery and carryout businesses in the US.
- The launch of the Parmesan Stuffed Crust Pizza has been successful, attracting new customers and meeting high expectations.
- The company completed a national rollout with DoorDash, which is expected to be a significant driver of US sales in the latter half of the year.
- Domino's rewards program continues to grow, contributing positively to the company's comps, particularly in the carryout business.
- The refranchising of 36 company-owned stores in Maryland resulted in a pre-tax gain, strengthening the brand's position for long-term success.
Negative Points
- The macroeconomic environment remains challenging, impacting financial results despite profit growth slightly ahead of expectations.
- Foreign currency fluctuations are expected to be a headwind, potentially impacting operating income growth.
- The international same-store sales growth is expected to be modest due to potential global macro and geopolitical uncertainties.
- The company faces pressure from a flat QSR pizza category, which could challenge sustained growth in the future.
- Corporate store margins were impacted by an insurance charge, highlighting potential vulnerabilities in the company's cost structure.
