Domino's hadn't missed on same-store sales in a year. Then it walked into Q1 and posted growth of 0.9% against a 2.72% forecast, sending the stock down about 9%.
Same-store sales are the metric Wall Street watches most closely for restaurants, since they strip out new store openings to show what's happening at locations that have been open at least a year.
International same-store sales fell 0.4%, also short of the 0.7% gain analysts had penciled in.
A $30 million pre-tax charge tied to Domino's stake in DPC Dash, a Chinese fast-food operator, pulled earnings per share down to $4.13. Wall Street had been looking for $4.27, and last year's Q1 came in at $4.33.
Total revenue still rose 3.5% to $1.15 billion, with the company adding 180 net new stores to bring its global count to 22,322. The headline growth numbers, though, told the story investors cared about most.
Net income for the quarter fell 6.6% to $139.8 million, while income from operations climbed 9.6% to $230.4 million. Global retail sales grew 3.4% excluding currency swings.
CEO Russell Weiner pointed to "an intensifying macro and competitive environment," which is polite corporate-speak for cost-pressed customers and tougher rivals.
The company has rolled back out the $9.99 "Best Deal Ever," "Mix and Match" and "Emergency Pizza" promotions, and launched a new Parmesan-stuffed crust pizza to win back value-focused diners.
On the capital return side: The board approved a new $1 billion share buyback on top of $290.2 million already authorized, plus a $1.99 quarterly dividend payable June 30. During Q1 the company bought back 188,304 shares for $75.1 million.
Pizza chains are a useful read on value-focused diners, since the category usually holds up best when consumers cut back elsewhere.
When even Domino's struggles to hit growth targets, that's a real signal about how much wallet pressure Americans are feeling, and it raises questions about how much room there is for restaurant stocks to keep climbing.
Earlier this year, Domino's projected 3% U.S. same-store sales growth for fiscal 2026, with the company saying most of that gain would come in the first half. The first half just missed.
Q2 results will tell investors whether the discount push is working or whether the slowdown is structural.
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