Domino’s Pizza earns money by charging franchisees for its brand and services, supplying stores with food and packaging, and operating a small number of restaurants itself. In its third fiscal quarter of 2026, operating profit rose 8.3%, even though sales at existing U.S. stores grew just 0.3%. Better purchasing and labor efficiency in the supply business, together with a larger franchise network, supported that gap. The company is generating enough cash to fund investment and substantial shareholder payments, but those payments leave less room as a major debt refinancing approaches.
Analysis period: the 12 weeks ended September 6, 2026, with separate comparisons for the first 36 weeks. Research cutoff: October 14, 2026, New York date; the latest substantive company disclosure reviewed is dated October 13.
Source: Domino’s third-quarter 2026 Form 10-Q, income statements, Note 1, and Management’s Discussion and Analysis, pp. 4, 7 and 18–29.
1. More orders and more stores support sales, but customers spend less per order
Domino’s is attracting more U.S. orders, while lower spending per order limits sales growth. The filing identifies higher transaction counts as the reason existing-store sales increased in both the quarter and the first 36 weeks. A lower average ticket—the amount spent on each order—offset part of that gain. It does not disclose enough detail to divide the ticket decline among discounts, menu choices and other changes.
This distinction matters because more orders can require more ingredients and deliveries without producing an equal increase in restaurant sales dollars. Domino’s supply business benefits from those additional store orders. Franchisees still have to cover the cost of preparing and delivering the meals.
The following comparisons separate sales at existing stores from growth across the whole network, which also includes new locations.
| Sales measure; growth versus the corresponding prior-year period | Third quarter 2025 | Third quarter 2026 | First 36 weeks 2025 | First 36 weeks 2026 |
|---|---|---|---|---|
| U.S. existing-store sales growth | 5.2% | 0.3% | 2.7% | 0.4% |
| International existing-store sales growth, excluding currency changes | 1.7% | 0.2% | 2.5% | -0.1% |
| U.S. total store sales growth | 7.0% | 2.1% | 4.5% | 2.3% |
| Global total store sales growth, excluding currency changes | 6.3% | 3.2% | 5.5% | 3.2% |
Source: 2026 third-quarter Form 10-Q, “Global Retail Sales,” “Same Store Sales Growth” and “Net Store Growth,” pp. 19–20. Existing-store sales are the company’s same-store measure, comparing stores with sales in corresponding weeks.
The weak growth extends beyond a single difficult comparison with last year. U.S. existing-store sales had grown only 0.1% in the second quarter of 2026, while the international measure declined 0.1%. The third quarter brought a modest improvement in those growth rates, rather than a broad acceleration.
Source: Domino’s second-quarter results, July 20, 2026, operational highlights and same-store sales table.
New stores provided a separate source of growth. Domino’s added 175 locations after closures during the third quarter, reaching 22,706 worldwide. Over the trailing four quarters, net additions were 167 in the U.S. and 789 internationally. Management says this expansion was the main driver of global retail sales growth and higher franchise royalties.
Approximately 99% of stores belong to independent franchisees. Their full sales are therefore not Domino’s corporate revenue. Customers spent $4.84 billion across the network in the quarter, while Domino’s reported $1.19 billion of consolidated revenue, including supplies sold to franchisees and the royalties they paid. The distinction explains how a relatively small corporate restaurant operation can support a much larger business.
Source: 2026 third-quarter Form 10-Q, overview and operating statistics, pp. 18–22.
The competitive evidence is mixed but useful. Papa Johns reported an 8.3% decline in North American comparable sales for its second quarter ended June 28, 2026; its management cited lower order volumes and heavy promotion across quick-service restaurants. Domino’s positive U.S. result in its second quarter ended June 14 shows better sales resilience in that earlier period. The different geography and reporting dates prevent treating the difference as a precise market-share gain.
Sources: Papa Johns second-quarter release, August 6, 2026, highlights and CEO commentary; Domino’s second-quarter release, same-store sales table.
International growth also depends on franchisees choosing to expand. Domino’s Pizza Enterprises, a separately listed master franchisee, accounted for about 24% of Domino’s international stores at December 2025. Its own fiscal 2026 release reported a 4.1% same-store sales decline while describing improved franchisee profitability after reducing broad discounting and closing weak stores. Those are the franchisee’s results, not consolidated Domino’s Pizza, Inc. results. They show why protecting restaurant profit can sometimes slow near-term sales and openings, even when it strengthens the operator’s ability to keep investing.
Sources: Domino’s 2025 Form 10-K, “Our Customers,” p. 5; Domino’s Pizza Enterprises fiscal 2026 release, August 26, 2026, pp. 1–2. The franchisee’s fiscal year ended in June 2026.
2. The supply business provides the largest part of the operating improvement
Supply-chain profit improved through both higher sales and lower costs relative to those sales. Revenue from this business rose 7.1% in the quarter. Management attributes the increase mainly to higher order volumes, alongside a 2.2% increase in the food-and-packaging basket price charged to stores. It estimates that pricing added about $17 million of the $49.2 million revenue increase; the filing does not provide a complete volume-and-mix bridge for the remainder.
The supply business also kept more of each sales dollar after buying food, paying staff and making deliveries. Its gross margin rose from 11.3% to 12.2%. Management attributes the improvement to more efficient purchasing, better labor efficiency and spreading labor costs across higher sales. Higher fuel costs partly offset those gains. Calculated from the income statement, supply-chain gross profit increased from $79.1 million to $91.0 million.
This is more meaningful than revenue growth caused only by higher food prices. Domino’s annual filing explains that its U.S. cheese pricing formula passes changes in the benchmark cheese price through to stores while leaving the dollar markup unchanged. Higher ingredient prices can therefore increase reported sales without adding equivalent profit.
Sources: 2026 third-quarter Form 10-Q, income statement and supply-chain discussion, pp. 4, 22 and 24; 2025 Form 10-K, “Supply Chain” and “Third-Party Suppliers,” p. 8. Gross-profit amounts above are calculated from the unrounded statement values.
The reported results show how the improvement reached the whole company.
| Consolidated results; USD millions except margins and EPS | Third quarter 2025 | Third quarter 2026 | First 36 weeks 2025 | First 36 weeks 2026 |
|---|---|---|---|---|
| Revenue | 1,147.1 | 1,185.6 | 3,404.3 | 3,530.6 |
| Operating profit | 223.2 | 241.8 | 658.3 | 704.2 |
| Operating margin | 19.5% | 20.4% | 19.3% | 19.9% |
| Net income | 139.3 | 152.2 | 420.1 | 427.7 |
| Net margin | 12.1% | 12.8% | 12.3% | 12.1% |
| Diluted EPS, USD per share | 4.08 | 4.60 | 12.22 | 12.80 |
Source: 2026 third-quarter Form 10-Q, consolidated income statements, p. 4. Margins are calculated using unrounded reported amounts.
Supply chain supplied 58% of the increase in the combined segment profit measure. The table below also deducts corporate costs, so segment results are not mistaken for consolidated operating profit.
| Third-quarter profit reconciliation; USD millions | 2025 | 2026 |
|---|---|---|
| U.S. stores: segment adjusted operating profit | 133.636 | 137.738 |
| Supply chain: segment adjusted operating profit | 60.663 | 72.537 |
| International franchise: segment adjusted operating profit | 67.283 | 71.740 |
| Combined segment adjusted operating profit | 261.582 | 282.015 |
| Corporate costs not allocated to segments | -38.414 | -40.036 |
| Loss from selling stores to franchisees | 0.000 | -0.206 |
| Reported consolidated operating profit | 223.168 | 241.773 |
Source: 2026 third-quarter Form 10-Q, Note 2, pp. 7–9. Management changed its segment profit measure in 2026 and reworked the 2025 segment comparisons on that basis. Sales between company businesses have been eliminated; corporate stock compensation remains in the corporate-cost deduction.
Restaurant economics provide the strongest counterweight to the supply-chain result. Company-owned restaurant gross margin fell from 16.3% to 12.0% in the quarter. Higher food prices and wages each added 0.6 percentage points to costs as a share of restaurant sales, while insurance costs also increased. This measure excludes some store-level charges, including royalties and advertising, and is not a measure of franchisees’ take-home profit. It nevertheless shows that serving more orders does not automatically make each restaurant more profitable.
Selling 77 company-owned restaurants to franchisees in the second quarter also changed the revenue mix. Domino’s stopped recording their full restaurant sales and instead collects franchise-related revenue. This largely explains the 25.8% decline in company-owned restaurant revenue; existing company-owned stores actually increased sales by 1.0%. The ownership change reduces direct restaurant exposure while preserving a commercial relationship with the stores.
Source: 2026 third-quarter Form 10-Q, Note 10 and U.S. stores discussion, pp. 16, 22 and 24.
Some of the profit growth in the first 36 weeks came from selling assets. Operating profit benefited from a $7.8 million aircraft-sale gain, while selling restaurants generated roughly the same gain as in the prior year. Removing both types of sale gains leaves calculated operating-profit growth of 5.8%, compared with reported growth of 7.0%. That still supports an operating improvement, although this limited adjustment retains other costs and benefits, including the biennial franchise gathering and the absence of approximately $5 million of prior-year severance expense.
Below operating profit, the falling value of Domino’s minority investment in Chinese master franchisee DPC Dash produced a $20.9 million unrealized loss: the company still held the shares. Compared with a $5.0 million net realized and unrealized investment gain a year earlier, this absorbed much of the operating improvement. Higher net interest costs absorbed another $8.9 million. Consequently, first-36-week net income grew only 1.8%. DPC Dash’s operating earnings are not consolidated into Domino’s results.
Sources: 2026 third-quarter Form 10-Q, Notes 5 and 10 and earnings discussion, pp. 12, 16 and 24–25. The pretax adjustment and profit bridge are set out in the calculation notes below.
Buybacks strengthened the per-share result. Third-quarter diluted shares averaged 33.115 million, down 3.0% from 34.146 million. Net income grew 9.2%, while diluted EPS grew 12.7%. Holding the prior-year share count constant, current profit would have produced about $4.46 per share; the smaller denominator added approximately $0.14 to reported EPS. Repurchases increased each remaining share’s portion of earnings while using cash that could otherwise fund the business.
Source: 2026 third-quarter Form 10-Q, Note 3, p. 10. Per-share attribution is calculated, before rounding.
3. Advertising payments reduced cash flow, and shareholder payments used most of the remainder
Cash generated after capital spending covered paid dividends and buybacks, but the amount left over narrowed sharply. Operating cash flow fell 5.7% in the first 36 weeks, despite higher profit. The largest adverse change came from when the advertising fund paid for campaigns.
Franchisees contribute to a consolidated advertising fund. Domino’s records matching advertising revenue and expense, so those contributions do not create operating profit. Cash still moves when franchisees pay and when the fund pays for advertising. In 2025, changes in the fund’s assets and liabilities added $27.1 million to operating cash flow. In 2026, they used $20.6 million—a $47.8 million year-to-year swing.
Other operating balances also provided less cash. Management points chiefly to the timing of payments to suppliers and payments of accrued expenses—bills already recorded but not yet paid. The combined cash-flow line changed from a $10.2 million source to a $5.1 million use. Meanwhile, the noncash DPC Dash loss was added back when calculating cash flow because marking down the investment did not itself spend cash.
Source: 2026 third-quarter Form 10-Q, cash-flow statement, advertising policy and “Operating Activities,” pp. 6, 25 and 29.
투자를 마치고 남은 현금은 줄었습니다
| Cash generation and allocation; USD millions | First 36 weeks 2025 | First 36 weeks 2026 |
|---|---|---|
| Operating cash flow | 552.256 | 520.601 |
| Cash capital spending | 56.667 | 60.829 |
| Free cash flow: operating cash less capital spending | 495.589 | 459.772 |
| Cash purchases of common stock, including excise-tax payments | 277.698 | 308.239 |
| Cash dividends and dividend equivalents paid | 119.503 | 134.331 |
| Remainder after these shareholder payments | 98.388 | 17.202 |
Source: 2026 third-quarter Form 10-Q, cash-flow statement, p. 6. Free cash flow and the remainder are calculated. Positive spending figures are deducted from the preceding cash subtotal. Free cash flow retains the advertising fund’s cash movements and excludes assets obtained through new leases.
The company received no cash proceeds from issuing debt during these 36 weeks. Its other funding sources included $27.6 million of asset-sale proceeds and $9.2 million from employees exercising stock options. Cash also went to employee share-award tax withholding and finance-lease principal. Including these items and currency movements, total cash within the cash-flow statement rose $34.4 million.
The apparent increase in immediately available cash was larger: unrestricted cash rose from $125.7 million to $229.0 million. However, debt-related and advertising restricted cash together fell $68.9 million. Thus the $103.4 million unrestricted-cash increase should not be read as $103.4 million of newly generated total cash. At quarter-end, only the $229.0 million unrestricted balance was available for general corporate use without those restrictions.
Source: 2026 third-quarter Form 10-Q, cash-flow statement and liquidity discussion, pp. 6 and 27–29. The complete cash-scope reconciliation appears below.
Timing also helps explain the dividend comparison. The quarter-end balance sheet included $67.6 million of dividends payable, compared with $2.7 million at year-end. The July-declared quarterly dividend was paid on September 30, after this cash-flow period. A further $1.99-per-share dividend was declared on October 6 for payment on December 30. Those payments need funding after the reported period; they are not part of the $134.3 million already paid.
Domino’s describes repurchases and dividends as ways to return cash to shareholders. Its remaining $1.15 billion buyback authorization permits future purchases without requiring that amount to be spent. With little free cash flow left after the payments shown above, the pace of future buybacks is an important choice between returning cash and retaining flexibility for investment and refinancing.
Source: 2026 third-quarter Form 10-Q, Note 4, overview, and “Share Repurchase Programs” and “Dividends,” pp. 10–11, 18 and 28.
4. Leases add substantial investment beyond the cash capital budget
New finance leases explain much of the growth in Domino’s property and debt. During the first 36 weeks, the company obtained $69.1 million of assets through new finance-lease obligations. These arrangements provide assets now in exchange for payments over time, rather than an equivalent upfront cash purchase. Their addition helps explain why net property increased even though cash capital spending was close to depreciation and amortization.
Cash capital spending of $60.8 million principally supported consumer and store technology, supply-chain centers and company-operated restaurants. Separately, the segment note identifies about $32.2 million of capital additions outside the operating segments, primarily software. That additions measure includes accrual timing and should not be added to the $60.8 million cash total. The filing does not divide spending into maintenance and expansion.
| Selected consolidated balances; USD millions | December 28, 2025 | September 6, 2026 |
|---|---|---|
| Receivables, excluding advertising-fund receivables | 315.958 | 286.489 |
| Inventory | 79.189 | 89.535 |
| Property and equipment, after depreciation | 324.022 | 375.415 |
| Software costs carried as an asset, after amortization | 159.256 | 163.513 |
| Finance-lease principal included in debt | 62.008 | 126.613 |
| Operating-lease liabilities | 231.470 | 235.919 |
| Total assets | 1,716.459 | 1,766.373 |
Source: 2026 third-quarter Form 10-Q, balance sheet, Notes 2, 8–10 and investing discussion, pp. 3, 9, 14–16 and 29.
The operating balances do not show customers leaving more unpaid sales on Domino’s books: receivables fell $29.5 million. Inventory rose $10.3 million, leaving more money tied up in goods awaiting use or sale. The company generally collects receivables within three weeks and turns over inventory several times a month. Those short cycles help fund normal operations, but they cannot resolve the much larger scheduled debt repayment discussed next.
Other balance-sheet changes have identifiable accounting causes. Selling restaurants reduced goodwill by about $2.8 million, bringing the balance to $7.9 million. The DPC Dash holding fell from $36.1 million to $15.2 million without a change in the number of shares held. Deferred tax assets—amounts expected to reduce future tax bills—fell from $22.1 million to $9.9 million; the cash-flow statement separately records a $12.0 million noncash deferred-tax expense. These movements should not be treated as new cash investment or immediate cash tax payments.
Source: 2026 third-quarter Form 10-Q, pp. 3, 6, 12, 16 and 27.
There are more lease commitments ahead. At September 6, $90.7 million of undiscounted future rent related to supply-chain property and vehicles whose leases had not yet begun. They are expected to start in 2026 and 2027, with terms extending up to 21 years. Existing operating leases also require ongoing payments; operating-lease cash payments were $37.7 million in the first 36 weeks.
These investments support the infrastructure behind franchise growth. They also create future costs even when cash capital spending looks modest. That tradeoff makes the new facilities’ utilization and the supply business’s continued efficiency more important than a simple comparison of capital spending with depreciation.
Source: 2026 third-quarter Form 10-Q, Note 8, pp. 14–15.
5. July 2027 is the key funding deadline
Domino’s plans to refinance $1.319 billion of notes before July 2027 and expects a higher interest rate. Moving those notes into current liabilities drove the large increase in debt classified as due within a year. Total recorded debt, including finance leases, increased much less: from $4.817 billion at year-end to $4.886 billion. The large current-liability change mainly reflects the approaching repayment date.
The notes are supported by designated franchise royalties, supply-chain income and intellectual property. Cash is set aside to service them before excess funds reach the parent company. Although their legal final maturities extend to 2047 and 2048, July 2027 is the economically important anticipated repayment date. Missing it would add at least five percentage points of annual interest and direct the securitized cash flows toward debt repayment, apart from a management fee for specified operating expenses.
Sources: 2026 third-quarter Form 10-Q, Note 6 and liquidity and market-risk discussions, pp. 13, 28 and 31; 2025 Form 10-K, Note 3, pp. 68–71.
| Fixed-rate note series; principal in USD millions at September 6, 2026 | Principal outstanding | Annual interest rate | Anticipated repayment |
|---|---|---|---|
| 2017 ten-year notes | 940.000 | 4.118% | July 2027 |
| 2018 9.25-year notes | 379.000 | 4.328% | July 2027 |
| 2021 7.5-year notes | 826.625 | 2.662% | October 2028 |
| 2019 ten-year notes | 648.000 | 3.668% | October 2029 |
| 2025 five-year notes | 500.000 | 4.930% | July 2030 |
| 2021 ten-year notes | 972.500 | 3.151% | April 2031 |
| 2025 seven-year notes | 500.000 | 5.217% | July 2032 |
| Total | 4,766.125 | — | — |
Sources: 2026 third-quarter Form 10-Q, Note 5, p. 13, for outstanding principal; 2025 Form 10-K, Note 3, pp. 68–71, for coupons and anticipated repayment dates. Balances shown are current principal, not forecasts of future payments after possible amortization.
The two groups of notes due for anticipated repayment in July 2027 currently carry approximately $55.1 million of annual coupon interest. As a business sensitivity, every additional one percentage point charged on the same $1.319 billion principal would add $13.2 million a year before tax and fees. This is a calculation, not a prediction of the refinancing rate. It illustrates how funding costs could absorb part of future operating improvements.
Continuing cash generation and unused credit support the company’s ability to manage the deadline. Domino’s had $229.0 million of unrestricted cash and $248.9 million of available borrowing capacity, after letters of credit. Together that was about $477.9 million, well below the upcoming note principal. Refinancing is therefore central to the company’s stated funding plan.
Domino’s reported debt equal to 4.2 times its trailing-year adjusted earnings measure, down from 4.5 times a year earlier. Fixed-note principal was unchanged across those two dates, so the improvement came from higher adjusted earnings. This measure adds back depreciation and stock compensation, and adjusts for gains and losses on assets; it is not cash available to repay debt. The calculation is reproduced in the notes.
Sources: 2026 third-quarter Form 10-Q, pp. 13 and 27–28; October 13, 2026 earnings release, “Comments on Regulation G” and leverage reconciliation. Interest and liquidity sensitivities are calculated.
The company met the tests allowing routine installments of note principal to be suspended. Those tests use contract-defined leverage limits of 5.0 times for the older notes and 5.5 times for the 2025 notes. A separate debt-service coverage covenant compares contract-defined cash flow with required debt payments and sets a minimum ratio of 1.75 times. Passing those tests preserves near-term cash; it does not remove the July 2027 repayment requirement or the consequences of breaching other debt terms.
The balance sheet also shows a $3.96 billion shareholders’ deficit. Repurchases and distributions can reduce reported equity below zero even while the business earns a profit. In these 36 weeks, dividends declared and repurchases charged to equity exceeded net income, contributing to a further $54.0 million decline in equity. For Domino’s, the practical constraint is the cash needed for debt, leases and continuing operations, alongside its contractual restrictions. The accounting deficit is not itself the amount due to lenders.
Source: 2026 third-quarter Form 10-Q, balance sheet, Notes 4 and 6 and covenant discussion, pp. 3, 10–13 and 28.
6. New products must turn more visits into profitable repeat business
Management’s next task is to make transaction growth more rewarding for store owners. Joe Jordan became CEO on October 1, after the quarter ended. In the October 13 earnings release, he emphasized franchisee profitability and more consistent execution. That focus fits the evidence: corporate supply profits improved, but company-owned restaurants retained less of each sales dollar after direct costs.
Sources: CEO succession announcement, June 22, 2026; October 13 earnings release, CEO commentary; 2026 third-quarter Form 10-Q, p. 24.
The new personal Detroit-style pizza, the Domino, targets occasions when customers want an individual meal or different toppings from their companions. Its announced nationwide launch was August 31, leaving only one week before the reporting period ended. At launch, a two-topping version joined the Mix and Match offer at $6.99 per item when buying two or more, with higher prices at some locations. A full quarter of sales would provide a more useful test than the limited exposure in this filing. The business benefit depends on adding profitable orders, rather than merely shifting customers from another Domino’s item.
Source: Domino’s product-launch announcement, August 11, 2026, launch timing, intended occasions and offer terms.
The company also promoted its redesigned website and app through an August offer giving qualifying digital customers $5 off a subsequent order. That offer connected a new ordering experience with a reason to return. Digital ordering is a large part of the business: more than 85% of U.S. retail sales used digital channels in 2025. The filing supports higher transaction counts overall, but it does not isolate repeat purchases or profit produced by this campaign.
Source: Domino’s digital-ordering announcement, August 3, 2026, promotion terms and digital-sales disclosure.
Domino’s has structural reasons to support franchisee economics. U.S. and Canadian franchisees that buy all their food from its centers generally participate in arrangements distributing 50% of supply-center pretax profits to participating stores. Efficient purchasing can therefore help both the corporation and store owners. Franchisees can also choose qualified outside suppliers, making service and competitive prices important to retaining the supply business.
Source: 2025 Form 10-K, “Supply Chain,” p. 8, and supply-chain competition risk, Item 1A.
Insurance and legal exposures deserve attention because costs are already affecting restaurant margins. Current and long-term insurance reserves totaled $62.2 million, compared with $59.1 million at December 2025. The company also guaranteed up to $18.4 million of franchisee lease payments, up from $12.6 million. The guarantees are potential payments, not an additional expense already incurred.
The filing describes employment, automobile, franchisee and other ordinary-course claims. Management believes existing accruals are adequate and does not expect a material adverse effect on the business or financial condition, but says adverse outcomes cannot be estimated accurately. No separate numerical range of additional litigation losses is provided. The last detailed annual tax note reported $4.5 million of unrecognized tax benefits and ongoing examinations by certain states at December 2025; that dated disclosure is not a newly measured September 2026 exposure.
Sources: 2026 third-quarter Form 10-Q, balance sheet, Note 8 and Part II, Item 1, pp. 3, 15 and 32; 2025 Form 10-K, Notes 6–7, pp. 75–78. Higher store insurance expense is discussed in the quarterly filing, p. 24.
7. The business is improving, but its next gains need to reach the restaurants
Domino’s has demonstrated operating improvement through its supply network and additional stores; stronger restaurant economics remain the next test. More customer orders, better purchasing and labor efficiency are tangible strengths. The slower pace of existing-store sales and weaker company-owned restaurant margins show why those strengths do not yet amount to a broad improvement across the system.
The most favorable business path is for new products and easier ordering to generate repeat purchases while supply savings and operating discipline help franchisees retain more profit. That would support further store investment and royalty growth. If spending per order remains weak or store costs keep rising, franchisees could find new stores harder to fund and operate profitably. At the corporate level, a timely refinancing and a pace of shareholder payments consistent with cash generation would preserve room to fund that work.
Reporting basis:
This analysis covers Domino’s Pizza, Inc. and its consolidated subsidiaries, CIK 0001286681, ticker DPZ. The selected unaudited U.S. GAAP Form 10-Q was filed October 13, 2026, accession 0001286681-26-000040, for the quarter ended September 6, 2026. Quarter comparisons are 12 weeks against the 12 weeks ended September 7, 2025. Cumulative comparisons are 36 weeks beginning December 29, 2025 and December 30, 2024, respectively. Balance-sheet comparisons use December 28, 2025. Fiscal 2026 is a 53-week year ending January 3, 2027; the 36-week results are not annualized here.
The supplied complete filing text is the principal source. SEC submissions metadata and relevant XBRL facts were checked against the filing, using actual period dates, consolidated scope and units rather than relying only on fiscal-period labels. SEC facts in dollars were converted to USD millions; share facts remained shares. External research is limited to the dated primary sources cited, with company information through October 13 and an October 14, 2026 research cutoff. It is not a claim that every development through October 14 was independently reviewed.
Sources: SEC filing index; SEC company submissions; SEC company financial facts; Form 10-Q, Note 1.
Calculation notes:
A. Checking growth and the source of operating profit
Growth is the current-period amount divided by the comparable prior-period amount, minus one. Operating margin is operating profit divided by revenue; net margin uses net income instead. Using USD millions, quarterly operating-profit growth is 241.773 ÷ 223.168 − 1 = 8.34%. Supply chain’s share of combined segment profit growth is (72.537 − 60.663) ÷ (282.015 − 261.582) = 58.11%. This uses the comparable segment measure before corporate costs.
The following limited adjustment removes asset-sale and refranchising gains from cumulative operating profit. All figures are before tax; no after-tax adjusted income or EPS is inferred.
| First-36-week operating-profit adjustment; USD millions | 2025 | 2026 |
|---|---|---|
| Reported operating profit | 658.307 | 704.169 |
| Remove net gains from selling restaurants to franchisees | -3.883 | -3.881 |
| Remove aircraft-sale gain | 0.000 | -7.780 |
| Calculated operating profit excluding these gains | 654.424 | 692.508 |
Calculated growth after these exclusions is 5.82%. This is not a claim that every remaining item recurs. It retains currency effects, stock compensation, the Worldwide Rally and the prior-year severance expense. Separately, the $45.862 million increase in reported operating profit, less the $25.931 million adverse investment-result change and the $8.918 million increase in net interest expense, equals the $11.013 million increase in pretax income. The $3.334 million increase in tax expense leaves $7.679 million more net income. The cumulative effective tax rate was 22.4%, versus 22.2%.
Source: Form 10-Q, pp. 4, 7–9 and 24–25.
B. Checking profit against cash
| First-36-week operating cash reconciliation; USD millions | 2025 | 2026 |
|---|---|---|
| Net income | 420.061 | 427.740 |
| Total noncash and other reconciliation adjustments | 94.816 | 118.615 |
| Changes in ordinary operating assets and liabilities | 10.242 | -5.126 |
| Changes in restricted advertising-fund assets and liabilities | 27.137 | -20.628 |
| Operating cash flow | 552.256 | 520.601 |
The adjustment subtotal sums every reconciliation line between net income and changes in operating balances in the cash-flow statement. Major 2026 components include depreciation and amortization of $61.501 million, stock compensation of $30.843 million and investment losses of $20.895 million, offset in part by removing asset-sale gains. The statement’s ordinary operating-balance line worsened by $15.368 million. Management’s narrative discusses a $13.7 million adverse change and attributes it mainly to payment timing; it does not reconcile that figure to the statement line. The table uses the statement amounts, which reconcile fully to operating cash flow.
| Cash included in the cash-flow statement; USD millions | December 28, 2025 | September 6, 2026 |
|---|---|---|
| Unrestricted cash | 125.675 | 229.035 |
| Restricted cash outside the advertising fund | 216.110 | 167.958 |
| Advertising-fund restricted cash | 92.200 | 71.422 |
| Total | 433.985 | 468.415 |
Opening cash of $433.985 million + operating inflow of $520.601 million − investing outflow of $34.167 million − financing outflow of $451.666 million − currency effects of $0.338 million = closing cash of $468.415 million. Restricted balances are included in this reconciliation but are not all available for general spending.
Source: Form 10-Q, cash-flow statement and cash discussion, pp. 6 and 27–29.
C. Checking equity, share retirement and the balance sheet
Retained deficit is the negative balance left in the accumulated-earnings account after profits, distributions and other charges. Additional paid-in capital records contributed capital and share-award entries above the shares’ small stated legal value. Repurchases and employee tax withholding reduced both accounts in 2026.
| Equity-account movements in the first 36 weeks of 2026; USD millions | Retained earnings or deficit | Additional paid-in capital |
|---|---|---|
| Opening balance | -3,898.622 | 1.910 |
| Net income | 427.740 | 0.000 |
| Dividends declared | -199.169 | 0.000 |
| Employee share-award tax withholding | -12.558 | -1.646 |
| Repurchases and related excise-tax accruals | -267.764 | -39.935 |
| Option-exercise proceeds | 0.000 | 9.205 |
| Stock compensation | 0.000 | 30.843 |
| Closing balance | -3,950.373 | 0.377 |
Common-stock capital fell from $0.336 million to $0.329 million after award issuance and share retirement. Currency translation increased accumulated losses recorded outside net income from $4.766 million to $5.431 million. These movements complete the explanation of the change in total shareholders’ deficit.
Domino’s repurchased and retired 848,503 shares; they are not held in a treasury-stock balance. Starting with 33,627,992 shares, adding 108,524 net award shares and 43,509 option-exercise shares, then subtracting 36,789 shares for award-tax withholding and the retired shares, gives 32,894,733 outstanding at September 6. Stock compensation was an expense of $30.843 million despite not requiring current cash payment. New awards and option exercises partly offset the share reduction from repurchases.
The equity charge for repurchases was $307.707 million, including accrued excise taxes. The cash-flow purchase amount was $308.239 million, including $3.3 million of previously accrued excise tax paid in 2026. Neither is interchangeable with the approximately $304.9 million cost of shares bought under the program. Dividends declared likewise differ from dividends paid.
Finally, assets of $1,766.373 million equal current liabilities of $1,879.450 million + long-term liabilities of $3,842.021 million − shareholders’ deficit of $3,955.098 million. The prior-year check is $1,716.459 million = $541.621 million + $5,075.980 million − $3,901.142 million. All amounts are consolidated.
Source: Form 10-Q, balance sheet, cash-flow statement and Notes 3, 4 and 9, pp. 3, 6, 10–11 and 15.
D. Checking the debt ratio and interest sensitivity
Management’s adjusted earnings measure for debt analysis starts with operating profit and removes specified noncash expenses and asset-sale effects. It is called Consolidated Adjusted EBITDA in the debt documents.
| Trailing-four-quarter debt-measure reconciliation; USD millions | Ended September 7, 2025 | Ended September 6, 2026 |
|---|---|---|
| Reported operating profit | 931.959 | 999.836 |
| Add depreciation and amortization | 87.886 | 89.200 |
| Add noncash stock compensation | 43.395 | 43.803 |
| Remove refranchising gains | -3.883 | -4.025 |
| Remove asset-sale gains | 0.000 | -7.780 |
| Add asset-disposal losses | 1.730 | 2.331 |
| Consolidated Adjusted EBITDA | 1,061.087 | 1,123.365 |
| Fixed-note principal | 4,766.125 | 4,766.125 |
| Debt divided by adjusted earnings | 4.5x | 4.2x |
The July 2027 coupon calculation is $940 million × 4.118% + $379 million × 4.328% = $55.112 million annually. The rate sensitivity is $1,319 million × 1% = $13.190 million of additional annual interest. Both hold principal constant and exclude fees, amortization and taxes. The leverage numerator is the fixed-note principal, with no variable-funding borrowings at either date; it differs from balance-sheet debt, which includes finance leases and other carrying-value adjustments.
Sources: October 13, 2026 earnings release, leverage-ratio reconciliation; 2025 Form 10-K, Note 3; 2026 third-quarter Form 10-Q, Notes 5–6 and 8.
This report is for information and business analysis. It is not investment advice or a recommendation to transact in any security.