What the company does 🌐
Domino’s Pizza, Inc. (DPZ) is a global pizza company that operates primarily through a franchise-based business model, meaning most stores are owned and run by independent franchisees while Domino’s earns revenue from royalties and fees and from its supply chain business. The company also operates a smaller number of company-owned stores. A major part of Domino’s model is supporting the system with technology (especially digital ordering) and a centralized logistics network that supplies ingredients to stores.
Financial Highlights 📊
- Revenue trend: Revenue increased from FY2022 to FY2024, reaching $4,706.4m in FY2024.
- Profitability trend: Operating income rose over the same period to $879.0m in FY2024, while net income increased to $584.2m.
- Margins: Gross margin and operating margin improved in FY2024 versus prior years.
- Cash generation: Operating cash flow remained strong in FY2024 at $624.9m, supporting dividends, share repurchases, and debt servicing.
- Capital structure: Domino’s reported negative stockholders’ equity, which makes equity-based ratios (like ROE) not meaningful for interpretation.
Key Risks ⚠️
- Franchise reliance: Results depend heavily on franchisees’ operational and financial health.
- Food and logistics costs: Ingredient and transportation cost volatility can pressure margins.
- Labor pressure: Hiring, retention, and wage inflation can raise store-level operating costs.
- Technology and cybersecurity: Digital ordering is critical, so outages or breaches can disrupt sales and customer trust.
- Brand and food safety: Quality or safety incidents can harm brand reputation quickly.
- International and currency exposure: Exchange rates and local conditions can affect reported results.
- High leverage: Significant debt and interest obligations reduce financial flexibility.
MD&A (What management focused on) 🧭
- Operational performance: Management emphasized revenue growth across core streams and ongoing focus on execution.
- Supply chain importance: The supply chain business remains a major engine, with profitability sensitive to input and delivery costs.
- Liquidity and cash flow: Management highlighted continued cash generation and liquidity to meet obligations.
- Capital allocation: The company continued returning capital through dividends and share repurchases while managing debt.
Takeaway ✅
Domino’s FY2024 results show a business that generated steady growth and strong cash flow, supported by a franchise-heavy model and a meaningful supply chain operation. At the same time, the company’s high leverage and negative equity mean investors typically focus more on cash flow durability and debt management than on equity-based ratios.
Income Statement Summary
(Units: $m, EPS in $ | Percentages rounded to one decimal place)
| FY2022 | FY2023 | FY2024 | |
|---|---|---|---|
| Revenue | 4,357.4 | 4,479.4 | 4,706.4 |
| Cost of Goods Sold | 2,669.1 | 2,751.9 | 2,857.9 |
| Gross Profit | 1,688.2 | 1,727.4 | 1,848.5 |
| Selling, General & Administrative | 428.3 | 434.6 | 459.5 |
| Operating Income | 780.4 | 819.5 | 879.0 |
| Net Interest Expense | (191.5) | (184.8) | (178.8) |
| Income Before Tax | 625.7 | 652.4 | 722.2 |
| Net Income | 510.5 | 519.1 | 584.2 |
| Earnings Per Share (Diluted) | 13.5 | 14.7 | 16.7 |
Plain English: Revenue and operating income increased steadily over the three-year period. FY2024 delivered the strongest results, driven by higher system-wide sales and improved operating efficiency. Interest expense remains meaningful, but operating income continues to comfortably exceed it.
Key Profitability & Return Metrics
(Percentages rounded to one decimal place)
| Metric | FY2022 | FY2023 | FY2024 |
|---|---|---|---|
| Gross Margin | 38.7% | 38.6% | 39.3% |
| Operating Margin | 17.9% | 18.3% | 18.7% |
| Net Margin | 11.7% | 11.6% | 12.4% |
| Return on Assets (ROA) | 31.9% | 31.7% | 34.2% |
| Return on Equity (ROE) | — | — | — |
| Debt-to-Equity Ratio | — | — | — |
Plain English: Profit margins improved gradually and peaked in FY2024. ROA increased, showing that the company generated more profit per dollar of assets. ROE and Debt-to-Equity are not shown because Domino’s reports negative stockholders’ equity, which makes equity-based ratios mathematically meaningless. This does not mean the business is unprofitable, but it does change how leverage and returns should be evaluated.
Balance Sheet Highlights
(Units: $m)
| FY2022 | FY2023 | FY2024 | |
|---|---|---|---|
| Cash & Cash Equivalents | 60.4 | 114.1 | 186.1 |
| Total Assets | 1,602.2 | 1,674.9 | 1,737.0 |
| Total Liabilities | 5,791.3 | 5,745.3 | 5,699.3 |
| Stockholders’ Deficit | (4,189.1) | (4,070.4) | (3,962.3) |
Plain English: Domino’s continues to report negative equity, largely due to heavy leverage and long-term capital return policies. This structure increases sensitivity to interest rates and refinancing conditions, making balance sheet monitoring essential for investors.
📝 Disclaimer
This article is intended for educational purposes only. It does not constitute financial, investment, or legal advice. All investment decisions involve risks, and readers should conduct their own research or consult with a licensed financial advisor.
👉 Domino’s Pizza (DPZ) 2024 10-K Analysis (Filed 2025) | Explained for Beginners