Domino’s Pizza (DPZ) stock is up 22% over the last month even as the company’s second-quarter 2026 performance was mixed at best. In an article last month, I noted that DPZ stock was a buy near its 52-week lows. With shares of Domino’s up sharply since then, let’s explore whether the stock is still a buy or if investors would be better off selling it here.
Domino’s Pizza Delivered Mixed Results in Q2
To fully consider DPZ stock, let’s first analyze the Q2 earnings report.
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Domino's Pizza reported revenue of $1.19 billion for the quarter, up 4.3% year-over-year (YOY) and slightly ahead of Street estimates. However, U.S. same-store sales data was disappointing, with the metric rising only 0.1% — the lowest growth in five quarters, and well below the 0.62% that analysts expected. The company blamed tepid same-store sales on the fall in average ticket price during the quarter amid somber customer reception to its premium series, including the new Slice Sauce. International same-store sales also disappointed, falling 0.1% in constant currency terms versus analysts' expected growth of 0.5%.
The supply-chain business, which distributes equipment and ingredients to both company-owned and franchised stores, was a bright spot. Supply-chain revenue rose 6.5%, driven by higher food prices and higher order volumes. Meanwhile, EPS rose 6.8% to $4.07 but fell short of the $4.11 expected by analysts.
Usually, such a set of numbers wouldn't be associated with a post-earnings rally. However, there was so much pessimism toward DPZ stock heading into the Q2 confessional that even an otherwise mixed earnings report cheered investors.
www.barchart.com Domino’s Harps on Order Count, Teases New Product
Domino’s offered upbeat commentary on the Q2 earnings call, particularly on order count, which outgoing CEO Russell Weiner stressed is a key metric to watch as it drives long-term growth. While Weiner refrained from providing the order count number, he said it was “up meaningfully in total and individually in our delivery and carryout businesses.”
“This means that while other restaurants were fighting for orders, millions of new customers came to Domino's,” the CEO added.
The company also teased a new product that Weiner said was his “favorite pizza, full stop.” Despite multiple analyst questions about the new product, management kept details scarce, which is understandable as it would want to keep them reserved for the actual launch. The company, however, said that the new product would “address an unmet consumer need, but this time with a pizza that is unique to Domino's.”
Domino’s Has Fared Well Against Competitors
Domino’s has been gradually taking market share from its competitors and has established itself as the largest pizza chain. According to Domino's, the gulf between the company and its competitors has widened and is currently the highest ever. In fact, the firm sees an opportunity to increase its market share even further.
Notably, while Domino’s continues to add new stores and expects net store adds of around 175 in the U.S. and 800 internationally, some of its major rivals are on a store-closure spree amid stagnant sales and an adverse macro environment. The pizza industry is also witnessing consolidation amid merger and acquisition (M&A) activity. Yum! Brands (YUM) recently sold Pizza Hut for a total consideration of $2.7 billion, while Papa John's (PZZA) is reportedly weighing a $1.5 billion offer from Qatari royal family-backed Irth Capital Management.
DPZ Stock Might Fit Into the Portfolios of Dividend Investors
Domino’s Pizza is a mature business, and while the company does invest in growth, it is left with a lot of cash. The company spends this cash on share buybacks, dividends, and deleveraging its balance sheet.
DPZ stock’s dividend payouts have increased at an annualized rate of nearly 20% over the last 10 years, including a 15% increase this year. The dividend yield has come off its 2026 highs amid the rally in shares, but at almost 2.5%, it is still quite healthy and around twice what an average S&P 500 Index ($SPX) constituent pays.
The stock's valuation multiples have also expanded over the last month. The forward price-to-earnings (P/E) multiple is now 18.1 times.
While the risk-reward is not as compelling as it was when I last covered Domino's Pizza stock, I believe more gains could be in the cards over the next year. DPZ stock could still fit into the portfolios of investors looking for high-quality dividend stocks that have a stable business and can deliver decent long-term capital appreciation.
www.barchart.com On the date of publication, Mohit Oberoi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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