Dominos Pizza Inc (DPZ) 10-Q 2026: AI Summary

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Domino's reported third-quarter net income of $152.2M ($4.60 diluted EPS) on revenue of $1,185.6M, with income from operations up 8.3% YoY.

Consolidated revenues increased $38.5 million, or 3.4%, in the third quarter of 2026 compared to the third quarter of 2025, primarily due to higher supply chain revenues and higher global franchise royalty revenues. The increases in supply chain revenues were primarily attributable to higher order volumes, as well as an increase in our food basket pricing to stores. The increases in U.S. and international franchise royalties and fees revenues were driven primarily by net store growth during the trailing four quarters. These increases in revenues were partially offset by lower U.S. Company-owned store revenues as a result of the refranchising of certain of our U.S. Company-owned store markets.

Total revenues rose 3.4% YoY to $1,185.6M, which management attributes primarily to higher supply chain revenues and higher global franchise royalty revenues.
Income from operations increased 8.3% YoY to $241.8M, and net income rose 9.2% YoY to $152.2M.
Global retail sales, excluding foreign currency impact, increased 3.2% YoY, with global net store growth of 175 stores in the quarter.
Working capital swung to negative $1.13B from positive $352.6M at December 28, 2025, primarily due to the current portion of long-term debt.

Results That Matter

Total revenues
Current period
$1.2M
Prior period
$1.1M
Change
+3.4%
Consolidated revenues increased $38.5 million, or 3.4%, in the third quarter of 2026 compared to the third quarter of 2025, primarily due to higher supply chain revenues and higher global franchise royalty revenues.
Gross margin
Current period
$476.4K
Prior period
$459.9K
Change
+3.6%
Consolidated gross margin (which we define as revenues less cost of sales) increased $16.5 million, or 3.6%, in the third quarter of 2026, primarily due to higher global franchise royalty revenues as discussed above, as well as gross margin dollar growth within supply chain, discussed below.
Income from operations
Current period
$241.8K
Prior period
$223.2K
Change
+8.3%
Income from operations increased 8.3% in the third quarter of 2026 compared to the third quarter of 2025.
Net income
Current period
$152.2K
Prior period
$139.3K
Change
+9.2%
Net income increased $12.9 million, or 9.2%, in the third quarter of 2026 compared to the third quarter of 2025.
Earnings per share – diluted
Current period
$4.60
Prior period
$4.08
Change
+12.7%
Diluted EPS increased 12.7% YoY, outpacing net income growth of 9.2%, as the diluted weighted average share count declined to 33,114,893 from 34,146,418.

Financial highlights: current period, prior period, change, and investor takeaway per metric
Metric	Current Period	Prior Period	Change	Investor Takeaway
Total revenues	$1.2M	$1.1M	+3.4%	Consolidated revenues increased $38.5 million, or 3.4%, in the third quarter of 2026 compared to the third quarter of 2025, primarily due to higher supply chain revenues and higher global franchise royalty revenues.
Gross margin	$476.4K	$459.9K	+3.6%	Consolidated gross margin (which we define as revenues less cost of sales) increased $16.5 million, or 3.6%, in the third quarter of 2026, primarily due to higher global franchise royalty revenues as discussed above, as well as gross margin dollar growth within supply chain, discussed below.
Income from operations	$241.8K	$223.2K	+8.3%	Income from operations increased 8.3% in the third quarter of 2026 compared to the third quarter of 2025.
Net income	$152.2K	$139.3K	+9.2%	Net income increased $12.9 million, or 9.2%, in the third quarter of 2026 compared to the third quarter of 2025.
Earnings per share – diluted	$4.60	$4.08	+12.7%	Diluted EPS increased 12.7% YoY, outpacing net income growth of 9.2%, as the diluted weighted average share count declined to 33,114,893 from 34,146,418.

What changed

Quarter over quarter, against the 10-Q for the quarter ended Jun 14, 2026.

Prior 10-Q

Revenue up 3.4%; Net income up 9.2%

Metric	Prior	Current	Change	Read as
Revenue	$1.1B	$1.2B	+3.4%	Favorable
Net income	$139.3M	$152.2M	+9.2%	Favorable
EPS	$4.11	$4.61	+12.2%	Favorable

Revenue+3.4%
Prior $1.1B, current $1.2BFavorable
Net income+9.2%
Prior $139.3M, current $152.2MFavorable
EPS+12.2%
Prior $4.11, current $4.61Favorable

▲ and ▼ show the direction of each change. Color and “Read as” show whether that direction is usually favorable for the metric.

Earnings Quality & Cash Conversion

Income from operations of $241.8M includes a $0.2M refranchising loss in the third quarter of 2026. For the three fiscal quarters of 2026, income from operations of $704.2M includes a $3.9M refranchising gain and a $7.8M gain on sale of assets. Other (expense) income includes a $2.5M pre-tax unrealized loss on the DPC Dash investment in the third quarter of 2026 and a $20.9M pre-tax unrealized loss for the three fiscal quarters of 2026.

Value Drivers & Capital Allocation

Period net income attributable to the parent / period-end assets, not annualized: 8.6%.

Forward Signals

No explicit financial guidance (e.g., revenue, EPS, or same-store sales ranges) is provided in the filing. The filing states that operating results for the third quarter and three fiscal quarters ended September 6, 2026 are not necessarily indicative of the results that may be expected for the 53-week fiscal year ending January 3, 2027.

Known trends

The Company expects to refinance the 2018 9.25-Year Notes and 2017 Ten-Year Notes prior to the anticipated repayment date, and expects, based on current benchmark rates, to refinance those notes at higher interest rates.
The Company had additional leases for certain supply chain real estate and certain supply chain vehicles that had not yet commenced with estimated future minimum rental commitments of $90.7 million, expected to commence in 2026 and 2027 with lease terms of up to 21 years.

Subsequent events

On October 6, 2026, the Board of Directors declared a $1.99 per share quarterly dividend on outstanding common stock for shareholders of record as of December 15, 2026, to be paid on December 30, 2026.

Risks

Excerpts are the filing’s own words; each heading is the start of its excerpt. Selected excerpts are not a complete risk inventory.

As of September 6, 2026, we had approximately $4.89 billion of long-term debt…
As of September 6, 2026, we had approximately $4.89 billion of long-term debt, of which $1.33 billion was classified as a current liability.
If we do not repay or refinance the 2018 9.25-Year Notes and the 2017 Ten-Year Notes prior…
If we do not repay or refinance the 2018 9.25-Year Notes and the 2017 Ten-Year Notes prior to the anticipated repayment date, additional interest of at least 5% per annum will accrue, and our securitized cash flows other than a weekly management fee to cover certain operating expenses would be directed to the repayment of the securitized debt.
The covenant requires a minimum coverage ratio of 1.75x total debt service…
The covenant requires a minimum coverage ratio of 1.75x total debt service to Securitized Net Cash Flow, each as defined in the indenture governing the securitized debt. In the event that certain covenants are not met, the notes may become due and payable on an accelerated schedule.
Approximately 7.1% of our total revenues in the third quarter of 2026, approximately 7.0%…
Approximately 7.1% of our total revenues in the third quarter of 2026, approximately 7.0% of our total revenues in the three fiscal quarters of 2026 and approximately 6.8% of our total revenues in both the third quarter and three fiscal quarters of 2025 were derived from our international franchise segment, a majority of which were denominated in foreign currencies.

4 of 4 excerpts located in the filing text

Balance Sheet & Liquidity

Leverage: This filing's standardized financial data reports no debt balance under a concept whose scope can be verified. That is an unestablished scope, not zero debt and not a net cash position; no total debt, net debt or debt-to-equity figure is stated.

Liquidity: As of September 6, 2026, the Company had $229.0 million of unrestricted cash and cash equivalents and $248.9 million of available borrowing capacity under its 2025 Variable Funding Notes, net of letters of credit issued of $71.1 million.

Working capital: Current assets $916.8M vs. current liabilities $1.9B (current ratio 0.49x). Prior reported balance sheet as of 2025-12-28: $894.2M vs. $541.6M (1.65x).

Maturities & covenants

The 2018 9.25-Year Notes and 2017 Ten-Year Notes have an anticipated repayment date of July 2027 and are classified as current portion of long-term debt.
The notes are subject to a minimum debt service coverage ratio of 1.75x total debt service to Securitized Net Cash Flow.
The Company satisfied the non-amortization tests for each respective series of notes as of the end of the third quarter of 2026.

Notable Footnotes

Notable Footnotes
Item	Impact
Investment in DPC Dash	The Company recorded a $2.5 million pre-tax unrealized loss in the third quarter of 2026 and a $20.9 million pre-tax unrealized loss in the three fiscal quarters of 2026 on its investment in DPC Dash, with the unrealized losses recorded in other (expense) income.
Refranchising of U.S. Company-owned stores	During the second quarter of 2026, the Company refranchised 77 U.S. Company-owned stores in Virginia and Michigan for proceeds of $19.8 million, recording a pre-tax refranchising gain of $3.9 million.
Lease guarantees	The Company has guaranteed lease payments related to certain franchisees' lease arrangements, with a maximum potential future payment of $18.4 million as of September 6, 2026, up from $12.6 million at December 28, 2025.

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