Domino's grew Q2 revenue 4.3% to $1.19B and diluted EPS 6.8% to $4.07, but U.S. same-store sales rose only 0.1% and international slipped 0.1%. The growth came from 209 net new stores, an 18% jump in supply chain profit, and buybacks.
Revenue
$1.2B
+4.3% YoY
Net income
$136M
+3.6% YoY
Diluted EPS
$4.07
+6.8% YoY
Operating margin
19.4%
Overview
Domino's grew second-quarter revenue 4.3% to $1,194.4 million and diluted earnings per share 6.8% to $4.07, but almost none of that came from existing stores selling more. U.S. same-store sales (sales at stores open in both periods, which strips out the effect of new openings) rose just 0.1%, and international same-store sales slipped 0.1% excluding currency moves. The growth came from three other places: 209 net new stores in the quarter, a 2.2% increase in the price of the food Domino's sells to its franchisees, and a smaller share count after buybacks.
The quarter covers the 12 weeks ended June 14, 2026 (Domino's uses 12-week quarters, with a 16-week fourth quarter). About 99% of its roughly 22,500 stores are run by independent franchisees, so Domino's makes its money mainly from royalties (a percentage of each franchisee's sales) and from selling dough, cheese and other supplies to U.S. and Canadian stores.
Key metrics
Metric
Q2 2026
Q2 2025
YoY Change
Total revenue
$1,194.4M
$1,145.1M
+4.3%
Income from operations
$232.0M
$225.0M
+3.1%
Operating margin
19.4%
19.7%
-0.3 pp
Net income
$135.8M
$131.1M
+3.6%
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Operating margin is the share of revenue left after running the business, before interest and tax. Domino's margin looks low for a franchisor for two reasons. Supply chain food sales, which carry thin margins, make up 61% of revenue. And U.S. franchise advertising contributions ($134.9M) are booked as both revenue and an equal expense.
Sales: store count doing the work, not existing stores
"Global retail sales" is the total sold at every Domino's store worldwide. Most of it is franchisees' revenue, not Domino's own. It reached $4,850.0 million in the quarter, up 3.0% excluding currency (U.S. +1.9%, international +4.1%), a clear step down from 5.6% growth in Q2 2025.
Same-store sales growth
Q2 2026
Q2 2025
First half 2026
First half 2025
U.S. company-owned stores
+2.1%
+2.6%
+3.3%
-0.2%
U.S. franchise stores
0.0%
+3.4%
+0.4%
+1.5%
Total U.S.
+0.1%
+3.4%
+0.5%
+1.4%
International (ex-currency)
-0.1%
+2.4%
-0.2%
+3.0%
The 10-Q says the U.S. figure was "driven by higher customer transaction counts, offset by lower average ticket": more orders, each one smaller. In the earnings release (8-K Exhibit 99.1), CEO Russell Weiner said the company "generated order count growth across both our delivery and carryout businesses" while "the broader U.S. QSR industry continued to face pressure on consumer demand." In plain terms, Domino's is winning more orders with value pricing and taking less money per order to do it. It was also up against a strong quarter a year earlier, when U.S. same-store sales grew 3.4%. Company-owned stores (+2.1%) outperformed franchise stores (0.0%), but only 186 stores are company-owned now, too few to say much about the whole system.
International same-store sales are now slightly negative for the first half (-0.2%), after +3.0% a year earlier. International royalty revenue still grew 6.0% to $81.8 million, helped by new stores and about $1.1 million from favorable currency moves.
Store growth
Domino's opened 250 stores and closed 41 in the quarter, for net growth of 209: 26 in the U.S. (25 franchise, 1 company-owned) and 183 internationally. Over the trailing four quarters it added 995 net stores (170 U.S., 825 international), ending at 22,531. It also refranchised, meaning sold to franchisees, 77 company-owned stores in Virginia and Michigan for $19.8 million, with a $4.1 million pre-tax gain. That sale explains the 11.5% drop in U.S. company-owned store revenue to $81.8 million. It isn't a sign of weaker demand.
Where the profit came from
Domino's reports profit for three segments using "Segment Adjusted Income from Operations": operating profit before asset-sale and refranchising gains and before unallocated corporate costs.
Segment profit
Q2 2026
Q2 2025
Change
U.S. stores
$134.2M
$131.2M
+2.3%
Supply chain
$76.4M
$64.7M
+18.1%
International franchise
$68.3M
$65.4M
+4.4%
Supply chain was the standout. Revenue rose 6.5% to $731.7 million. Two things drove it: more orders, and a 2.2% increase in the food basket price charged to stores, worth about $19 million of revenue according to the 10-Q. Gross margin rose 0.2 points to 12.0% because food costs fell to 70.2% of segment revenue. The 10-Q credits "procurement productivity," meaning buying more cheaply, which higher delivery costs partly offset. Supply chain volume tracks the number of orders, so the extra transactions paid off here even though they barely lifted same-store sales.
Company-owned stores were squeezed. Store gross margin fell from 15.6% to 11.4% of store revenue. Food costs rose 0.8 points, from the same higher basket prices. Labor rose 1.0 point on "higher wage rates," and insurance costs also increased. The damage is limited, because company-owned store gross margin was only $9.3 million in the quarter.
A one-off cost. General and administrative expense rose 7.2% to $115.4 million. The main reason was the Worldwide Rally, a franchisee event held every two years. That cost won't return next year, so it lowered this quarter's margin by an amount that won't repeat. Excluding the $1.1 million currency benefit, operating income grew 2.6%, according to the earnings release.
Below operating profit: China stake and interest
DPC Dash stake. Domino's owns 3.0% of DPC Dash, its Hong Kong-listed master franchisee in China, and marks the stake to its market price every quarter. The share price fell from HK$71.90 at year-end to HK$35.58, which produced a $12.4 million pre-tax loss this quarter. The same line was a $16.0 million loss in Q2 2025, so the year-over-year swing actually helped slightly. Excluding it, pre-tax income rose about 1.8% ($187.6M vs. $184.2M).
Interest. Net interest expense rose 8.9% to $44.4 million, mainly because Domino's earned less interest on its cash. The weighted average borrowing rate rose to 3.9% from 3.8%.
The effective tax rate was 22.5%, up from 22.1%. Net income rose 3.6%. EPS grew faster, 6.8%, because buybacks reduced the diluted share count.
Year to date
Over the first 24 weeks, revenue rose 3.9% to $2,345.0 million and operating income rose 6.3% to $462.4 million. The operating figure includes a $7.8 million Q1 gain on the sale of the company's fully depreciated corporate aircraft. Net income fell 1.8% to $275.6 million because the DPC Dash stake went from an $8.1 million gain last year to an $18.4 million loss. Diluted EPS was $8.21, up 0.9% from $8.14.
Free cash flow, meaning operating cash flow minus capital spending, was $313.6 million, down from $331.7 million. The release attributes the drop to working-capital timing and advertising-fund payments.
Debt, buybacks and dividend
Domino's borrows mainly through securitized debt: bonds backed by its franchise royalties and supply chain cash flows, not by the company's general credit. Shareholders' equity is negative, a $3.98 billion deficit, because years of debt-funded buybacks and dividends returned more cash than the company kept.
Debt: about $4.88 billion of long-term debt, including $4.77 billion of fixed-rate securitized notes. The leverage ratio is securitized debt divided by trailing-12-month Consolidated Adjusted EBITDA, a measure of operating profit before depreciation and some non-cash items. According to the earnings release, it fell to 4.3x from 4.7x, mainly because EBITDA grew to $1,104.3 million. The company says it has historically operated between 4x and 6x.
Refinancing ahead: $1.32 billion of notes has an anticipated repayment date of July 2027: the 2017 Ten-Year Notes ($940.0 million) and the 2018 9.25-Year Notes ($379.0 million). Domino's says it expects to refinance them before then. If it doesn't, at least 5% of extra annual interest starts accruing and cash flow is redirected to paying down the debt.
Buybacks: Domino's bought back 443,917 shares for $156.2 million in Q2, about $352 per share on average, and $231.3 million worth in the first half. In April the board added $1.0 billion to the program, and $1.23 billion remained available at quarter-end.
Dividend: $1.99 per quarter, up 14.4% from $1.74 a year earlier. The board declared it again on July 14, payable September 30.
Delivery apps
The 10-Q and the earnings release give no figures on third-party delivery marketplaces and don't name any partner. The 10-Q mentions the topic only in risk language, as "our participation in the third-party order aggregation marketplace." The release says Domino's got more than 85% of its 2025 U.S. retail sales through digital channels. Neither filing shows how much of this quarter's order growth came through outside apps.
Takeaway: Domino's is growing per-share earnings through store openings, supply chain efficiency and buybacks, not because existing stores are selling more. U.S. franchise same-store sales were flat and international turned slightly negative, even though order counts rose. Supply chain profit grew 18.1% on 6.5% revenue growth, which shows what extra orders are worth to Domino's even when each order is smaller. That lever only works while order growth continues.
Outlook
Neither the 10-Q nor the earnings release gives numeric guidance for 2026. What the numbers imply:
Supports growth: the 995 net stores added over the past year keep royalty and supply chain revenue rising even if same-store sales stay flat. The Worldwide Rally cost won't repeat in 2027. At 4.3x leverage there is room to keep buying back stock under the $1.23 billion authorization.
To watch: whether U.S. franchise same-store sales turn positive again; whether international same-store sales stop declining; wage and insurance pressure at company-owned stores; and the terms of the roughly $1.32 billion July 2027 refinancing. A higher interest rate on the new notes would add to interest costs that are already rising.
Our view: with same-store sales near zero, operating profit growth should stay in the low-to-mid single digits, carried by new stores and supply chain, with buybacks adding a few points to EPS. Faster growth would take a clear return to positive same-store sales, and this quarter doesn't show that yet.
Source: Domino's Pizza, Inc. Form 10-Q for the quarter ended June 14, 2026 (filed July 20, 2026). The leverage ratio, free cash flow, currency-adjusted operating income growth and CEO comments are from the Q2 2026 earnings release (Form 8-K, Exhibit 99.1, July 20, 2026).