By Evie Liu

Domino's Pizza on Monday posted quarterly results that were weaker than Wall Street had expected as U.S. consumers remain tepid when it comes to restaurant spending.

For the fourth quarter of 2024, Domino's reported total revenue of $1.44 billion, up 2.9% from the year ago period but less than the $1.48 billion analysts tracked by FactSet had expected. Domino's reported $4.89 in earnings per share, an increase of 9.2% from the year-ago period, and slightly below the expected $4.90 per share.

Excluding the impact of foreign currency exchange rates, global retail sales increased 4.4% from a year ago to $5.94 billion in the fourth quarter. Same-store sales rose 0.4% from a year ago in the U.S. and 2.7% in international markets. The pizza chain added 775 more restaurants in its 2024 fiscal year, about half of which were opened in the fourth quarter.

This isn't the first time the pizza chain has showed weakness. When the company reported third-quarter earnings, Domino's management cut its projection for global retail sales growth for 2024, citing a "challenging macroeconomic environment," and suspended its previous goal of opening 1,100 new restaurants by 2028.

As of Friday's close, Domino's shares had declined 13% from their recent peak in June 2024, but were up 10% over the past 12 months.

Like most fast-food peers, Domino's has increased the number of promotions and deals in recent months to draw traffic back into its stores. The company also refreshed its loyalty program and rolled out innovative marketing campaigns as consumer spending remains weak.

Despite the softer-than-expected results in the fourth quarter, Domino's menu innovation, expanded loyalty program, and partnership with delivery platform DoorDash could help it accelerate same-store sales growth in the second half of 2025, wrote Wedbush analyst Nick Setyan in a Friday note.

He isn't the only one keeping faith in the stock. Earlier this month, Berkshire Hathaway revealed in a filing with the Securities and Exchange Commission that it had nearly doubled its holding in Domino's. Berkshire took its first stake in the company, worth $550 million, in November.

Domino's was also named a Barron's stock pick in December. Reporter Jacob Sonenshine argued at the time that the pizza chain's poor 2024 performance can be blamed on economic pressures, not management missteps. The company's success hinges on a 2025 recovery in international markets -- particularly those in Europe and Asia, he wrote.

For long-term investors, there is more good news: In the fourth quarter, Domino's board of directors approved a 15% increase in quarterly dividend, which is now $1.74 per share.

Write to Evie Liu at evie.liu@barrons.com

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February 24, 2025 06:07 ET (11:07 GMT)

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