Domino's to Report Q4 Earnings: What's in the Offing for the Stock?

Domino's Pizza, Inc. DPZ is scheduled to report fourth-quarter fiscal 2025 results on Feb. 23, before the opening bell. 

DPZ’s earnings topped the consensus mark in two of the trailing four quarters and missed on the remaining two occasions, the average surprise being 1.1%.

Trend in DPZ’s Estimates

The Zacks Consensus Estimate for earnings is pegged at $5.36 per share, which implies 9.6% growth from the prior-year quarter. In the past 30 days, estimates for earnings have remained unchanged.

Domino's Pizza Inc Price and EPS Surprise

Domino's Pizza Inc price-eps-surprise | Domino's Pizza Inc Quote

The consensus mark for revenues is pegged at $1.52 billion, indicating growth of 4.9% from the year-ago level.

Factors to Note Ahead of DPZ’s Q4 Results

Domino's fourth-quarter fiscal 2025 revenues are expected to benefit from strong performance at existing stores, supported by value-focused promotions and menu innovation. Expansion of locations, steady gains from aggregators and improved digital platforms are likely to have aided top-line growth. Initiatives such as Best Deal Ever, Parmesan Stuffed Crust and broader carryout and delivery offerings are expected to have supported order growth. 

The Domino's Rewards program continues to play a key role in driving customer engagement and repeat purchases in the U.S. market. International operations are also likely to have remained supportive, led by continued strength in India and China.

For the fiscal fourth quarter, our model predicts comps at the U.S. company-owned and franchise stores to grow 1.3% and 2.5%, respectively, year over year. Also, we expect international comps to increase 0.1% compared with 2.7% a year ago.

Our model predicts total U.S. store revenues to grow 3.3% from the year-ago levels to $485 million. Per our model, supply-chain revenues should rise 6.4% from the prior-year actuals to $931.8 million. International Franchise Royalties and Fees are expected to increase 5.8% year over year to $104.1 million.

However, inflationary pressures in commodity and labor costs, as well as a challenging macro environment that has shown signs of slowing across the restaurant industry, are likely to have negatively impacted performance in the to-be-reported quarter. The company has indicated that macro pressures intensified entering the fiscal fourth quarter, which might have weighed on margins. We expect the gross margin in the quarter under review to be 38.7% compared with 39.2% in the prior year.

With a solid foundation of innovative initiatives and focus on customer satisfaction, DPZ is well-positioned to sustain its growth trajectory and create long-term value for shareholders.

What the Zacks Model Unveils

Our proven model predicts an earnings beat for Domino's this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is exactly the case here.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Domino's has an Earnings ESP of +2.88% and a Zacks Rank #3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Other Stocks to Consider

Here are some other stocks from the Zacks Retail-Wholesale you may consider, as our model shows that these, too, have the right combination of elements to beat on earnings this season.

Starbucks SBUX has an Earnings ESP of +0.58% and a Zacks Rank of 3 at present.

In the to-be-reported quarter, Starbucks’ earnings are expected to register a 2.4% year-over-year increase. Starbucks’ earnings missed the Zacks Consensus Estimate in each of the trailing four quarters, the average negative surprise being 12.1%.

The Cheesecake Factory Incorporated CAKE currently has an Earnings ESP of +0.61% and a Zacks Rank of 3.

In the to-be-reported quarter, Cheesecake Factory’s earnings are expected to decline 5.8% year over year. CAKE’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 12.7%.

Restaurant Brands QSR currently has an Earnings ESP of +0.67% and a Zacks Rank of 3.

In the to-be-reported quarter, Restaurant Brands’ earnings are expected to register a 9.3% year-over-year rise. Restaurant Brands’ earnings surpassed estimates in two of the trailing four quarters and missed twice, the average negative surprise being 0.2%.

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This article originally published on Zacks Investment Research (zacks.com).

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