Domino's Pizza, Inc. DPZ

The business

Domino's sells pizza through 22,142 stores in more than 90 markets, and almost none of them are its own. At fiscal 2025 year end the US system was 7,186 stores of which only 262 were company-owned, and all 14,956 international stores were franchised. The revenue line does not look asset-light at all, because supply chain (dough, cheese, and equipment sold to franchisees out of 22 US and five Canadian commissaries) is $2,989.5M of the $4,940.0M reported in fiscal 2025. That number is the trap: supply chain converts 60.5% of revenue into 27.0% of segment profit, a roughly 10.7% margin, so gross revenue systematically overstates the economics. The engine is elsewhere. US stores is 32.6% of revenue and 48.6% of fiscal 2025 segment income at $575.3M, and international franchise is 6.9% of revenue and 24.4% of segment income, or $288.5M of profit on $338.7M of revenue. That last line is a pure royalty on $10.2B of international retail sales Domino's neither builds nor staffs, and it is the highest-quality dollar in the company.

What the financials do not show is that the terminal driver here is store count, not comps, and store count just slowed. The "Hungry for MORE" framework published for 2024 through 2028 commits to 7%+ annual global retail sales growth, 8%+ income-from-operations growth, and 1,100 net new stores a year. Fiscal 2025 delivered 776 net new stores and global retail sales growth of 5.4% excluding currency, against $20.1B of global retail sales. Trailing-twelve-month net unit growth through the March 2026 quarter was 964, still short of the target. Q1 2026 was the crack: US same-store sales came in at +0.9% (carryout +2.4%, delivery a negative 0.3%) against roughly 2.7% expected, international comps went to a negative 0.4% excluding currency, and the stock fell 10.5% on the print. Management framed 2026 US comps as positive low single digits against the prior 3% anchor, citing macro and competitive pressure. Aggregator delivery through the third-party marketplace is the offsetting lever, adding order volume at a lower margin per ticket than the owned channel, and it is now carrying the delivery business rather than growing it. Berkshire Hathaway, which built a position approaching 10% across six quarters, does not appear among Domino's Q1 2026 institutional holders, consistent with a full exit in the quarter.