Why Domino's Pizza Stock Dove Today
Key Points
An investment in food delivery hit the company's earnings.
International same-store sales declined in Q1.
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Domino's Pizza (NASDAQ: DPZ) didn't deliver for shareholders today. The company came up short in the first quarter, with earnings declining from the year-ago period and revenue missing Wall Street's expectations.
Shares tumbled on the news. Domino's stock was lower by 9.5% at 11:55 a.m. ET.
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Time to buy the dip?
Domino's reported an increase in global sales, driven in part by new store openings. International same-store sales declined, however. Total sales growth of 3.4% was also lower than the year-ago period. A negative valuation adjustment also contributed to the decline in earnings. The $30 million revaluation was for DPC Dash, a food delivery service that employs independent contractors in place of traditional in-store employees.
Even with overall sales growing, Domino's share price has now declined by more than 30% over the last year. That has lowered the company's forward price-to-earnings (P/E) ratio to under 17, its lowest level in three years.
On the positive side, income from operations jumped nearly 8% versus last year, excluding currency gains. The company said that was mostly due to higher U.S. and international franchise royalties and fees.
Management is focusing on the competition and its ability to gain market share. CEO Russell Weiner said he believes the company can "take meaningful share in 2026 and beyond" to help continue growth.
Investors who think that's true could be getting a fine opportunity to buy Domino's Pizza stock after today's plunge.
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Howard Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Domino's Pizza. The Motley Fool has a disclosure policy.
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