Domino's Pizza surprised the market thanks to its bet on a budget menu. Shares rose

Domino's Pizza, the world's largest pizza chain, reported stronger-than-expected growth in comparable sales - amid a challenging restaurant industry. The company's consumers were attracted to its budget offerings and promotions, and as a result, spending by low-income customers increased. Domino's shares reacted with growth.

Domino's Pizza's comparable U.S. sales, meaning sales excluding chain expansion, rose 3.7% in the fourth quarter, the company said in a report. Analysts had expected the figure to be 3.47%, according to LSEG data cited by Reuters, while the Bloomberg consensus had suggested a 3.3% increase.

That result was made possible by higher restaurant delivery volumes, as well as higher ingredient prices and franchisee advertising and royalty fees, the company said. The relaunch of the "Best Offer Ever" promotion, in which chain restaurants offered any pizza with any toppings for $9.99, also helped. Sales increased due to increased traffic rather than average check, which is rare in the restaurant industry, CNBC explained.

In 2026, the company expects U.S. comparable sales growth of about 3 percent, 0.2 percentage points above analysts' forecast, Bloomberg noted. The management announced that it plans to focus on new products, development of delivery and expansion of cooperation with third-party services. At the same time, CFO Sandeep Reddy warned of a slight increase in menu prices, Bloomberg reports.

Domino's could also benefit from plans by Pizza Hut owner Yum! Brands to close about 250 restaurants in the U.S., he said. In an interview with CNBC, Domino's CEO Russell Weiner recalled the difficulties of another competitor, Papa John's, and allowed that Domino's could double its market share.

The pizza chain's international comparable sales added just 0.7% for the quarter, falling short of Wall Street estimates of 1.03% due to weak demand and competition in Australia and Japan, Reuters writes.

Quarterly revenue was $1.54 billion - against analysts' forecast of $1.52 billion, CNBC points out .

While many major foodservice players continue to struggle, Domino's Pizza has relied on stronger demand from lower-income consumers, CNBC reports. According to CEO Weiner, favorable pricing on the chain's key product has ensured success. As a result, spending by such customers increased both in the fourth quarter and year-to-date.

Another fast-food company that has managed to bring customers back to its restaurants is McDonald's, which has also launched low-cost set lunches to attract budget-conscious customers amid rising prices of essential goods, Reuters notes.

The scale of the business allows Domino's to keep prices lower than competitors and build market share, said Michael Heylen, senior analyst at Bloomberg Intelligence. The company's partnership with online ordering aggregator DoorDash, which began in April 2025, should support comparable sales, especially in the first half of the year, he said.

"The company continues to win back market share in the U.S. pizza market" thanks to a favorable menu, digital technology and faster delivery, Reuters quotes Morningstar analyst Ari Felhandler as saying.

Domino's shares rose by 4.1% at the end of trading on February 23. Since the beginning of the year quotes of the company fell by about 4%, while the securities of rival chain Papa John's lost about 14.9%.

Berkshire Hathaway grew its Domino's stake to 9.9% in the fourth quarter of 2025 - the last under Warren Buffett - by buying 368,000 shares. The investment firm's stake in the pizza chain increased the most during the quarter.

14 of 29 analysts tracking Domino's Pizza shares advise to buy them, Marketwatch data show. 12 - recommend not to increase, but also not to reduce the position, and three suggest selling these securities. The average target price is $471, which implies a potential upside of 18%.

This article was AI-translated and verified by a human editor