Domino's Pizza, Inc. DPZ is scheduled to release second-quarter fiscal 2026 results on July 20.
The Zacks Consensus Estimate for DPZ’s fiscal second-quarter earnings per share (EPS) is pegged at $4.10, suggesting a 7.6% increase from $3.81 reported in the prior-year quarter. The consensus mark for earnings has decreased by 1.7% in the past 60 days.
DPZ Earnings Estimate Trend
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The consensus mark for fiscal second-quarter revenues is pegged at $1.18 billion, indicating growth of 2.8% from the year-ago quarter’s reported figure.
Domino's has a poor earnings surprise history in the trailing four quarters. Its earnings beat the Zacks Consensus Estimate in only one of the trailing four quarters and lagged on three occasions, the average miss being 1.1%. In the last reported quarter, the company reported a negative earnings surprise of 3.7%.
DPZ Earnings Surprise History
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Q2 Earnings Whispers for DPZ Stock
Our proven model does not conclusively predict an earnings beat for Domino's this time around. A stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to beat on earnings. But that's not the case here.
DPZ’s Earnings ESP: Domino's has an Earnings ESP of -4.15%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Domino's Zacks Rank: The company currently has a Zacks Rank #4 (Sell).
Domino's Pizza Inc Price and EPS Surprise
Domino's Pizza Inc price-eps-surprise | Domino's Pizza Inc Quote
You can see the complete list of today’s Zacks #1 Rank stocks here.
Factors Likely to Influence DPZ’s Q2 Results
Domino’s fiscal second-quarter revenues are likely to have benefited from continued aggregator momentum, carryout demand and expansion of the company’s global store network. Its presence across first-party delivery and third-party platforms may have broadened access to higher-income delivery customers, partially offsetting pressure among more value-sensitive consumers. New store openings in the United States and international markets likely supported systemwide retail sales and franchise royalties, while U.S. unit expansion may have aided supply-chain volumes in the to-be reported quarter.
Our model predicts fiscal second-quarter supply chain revenues to rise 9.1% year over year to $749.9 million. Revenues from International Franchise Royalties and Fees are expected to rise 7.3% year over year to $82.8 million.
However, persistent pressure on consumer spending is likely to have negatively impacted the company's performance in the fiscal second quarter. Domino’s indicated that the macroeconomic pressure experienced in March formed the base assumption for its revised annual outlook. Weak consumer sentiment, ongoing inflation and higher gasoline prices may have constrained disposable income and limited restaurant-order frequency, particularly among lower-income customers. Consequently, demand across delivery and carryout may have grown at a slower pace than the company initially anticipated.
Heightened promotional competition is also likely to have negatively impacted the top line. National pizza competitors introduced offers comparable to Domino’s established value promotions, while the broader quick-service restaurant industry continued to emphasize affordability. This competitive environment may have weighed on order-count momentum and average ticket growth. Greater customer preference for discounted offerings could also have resulted in an unfavorable sales mix, partly offsetting the benefit of menu pricing.
Internationally, continued unit expansion likely aided fiscal second-quarter retail sales and franchise revenues. Nonetheless, persistent weakness at Domino’s Pizza Enterprises may have constrained comparable sales and royalty growth. The master franchisee continued to face challenges related to its value proposition and order-count generation. Macroeconomic and geopolitical uncertainty across global markets may have added further pressure to international business.
Increases in insurance and other operating expenses remain areas to monitor. Our model predicts the total cost of sales for the second quarter of fiscal 2026 to rise 5% year over year to $718.8 million, which could have implications for margin trends. Our model forecasts fiscal second-quarter gross margin at 39%, indicating a decline of 130 basis points from 40.3% reported in the prior-year quarter.
DPZ’s Stock Price Performance & Valuation
Domino’s shares have lost 24.5% so far this year, underperforming the Zacks Retail - Restaurants industry’s gain of 2.5% and the S&P 500’s rise of 11.1%. Its peers, such as BJ's Restaurants, Inc. BJRI and Arcos Dorados Holdings Inc. ARCO, have jumped 53.8% and 11.6%, respectively, during this time.
YTD Price Performance – DPZ, BJRI, ARCO, Industry & S&P 500
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From a valuation perspective, Domino’s stock is currently trading at a discount. It is currently trading at a forward 12-month price-to-sales (P/S) multiple of 1.95, well below the industry average of 3.34.
DPZ’s P/S Ratio (Forward 12-Month) vs. Industry
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Other industry players, such as BJ's Restaurants and Arcos Dorados, have a P/S of 0.87 and 0.33, respectively.
Investment Considerations for DPZ Stock
Domino’s long-term fundamentals remain supported by its scale-driven value proposition, continued market-share gains and highly franchised business model. Expansion across carryout and aggregator channels, a strong domestic development pipeline and continued international unit growth provide avenues for systemwide sales expansion. Procurement productivity, healthy franchisee economics and robust cash generation also support advertising, product innovation and shareholder returns.
However, the near-term operating environment remains challenging. Persistent consumer pressure, aggressive promotional competition, an unfavorable sales mix and continued weakness at Domino’s Pizza Enterprises remain concerns.
How to Play Domino’s Stock Now?
Domino’s retains a durable long-term platform, supported by its franchise-heavy model, expanding carryout opportunity, aggregator reach and strong brand economics. However, the immediate earnings setup is less compelling. Sluggish consumer demand, aggressive value competition, unfavorable mix and continued weakness at Domino’s Pizza Enterprises could weigh on operating momentum and earnings leverage in the fiscal second quarter.
The stock’s valuation discount may attract attention following its sharp year-to-date decline, but it does not fully compensate for the near-term execution risks. With earnings estimates trending downward, DPZ lacks a compelling pre-earnings catalyst. Current shareholders may consider reducing exposure, while prospective investors may wait for a more favorable entry point after the earnings release.
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This article originally published on Zacks Investment Research (zacks.com).