Domino's shares collapsed after the report. Buffett bought them most actively before his resignation

Domino's Pizza shares plummeted nearly 9% on Monday, April 27, after reporting weaker-than-expected growth in comparable sales in the United States. The company's stock was at its lowest level in three years. Berkshire Hathaway and related entities own nearly 10% in the pizza chain. Moreover, Berkshire increased its stake in Domino's in the last quarter under the guidance of the "oracle of Omaha" - billionaire Warren Buffett.

Domino's Pizza restaurant chain Domino's Pizza's comparable sales in the U.S. domestic market rose just 0.9% in the first quarter ended March 22. Wall Street analysts had expected a 2.3% increase, according to StreetAccount estimates, CNBC wrote. "We're not happy with that," Domino's Pizza CEO Russell Weiner told the network. The company also reported a 0.4% decline in quarterly comparable sales in international markets, while analysts had expected a 0.7% increase, according to LSEG, Reuters writes.

The pizza chain worsened its full-year outlook for comparable sales in the U.S.: the company now expects only modest growth (low-single digit), whereas it had previously expected a 3% increase in U.S. comparable sales.

Domino's Pizza revenue in the first quarter rose 3.5% to $1.15 billion, but it was also lower than analysts expected ($1.16 billion), Barron's said. The restaurant chain had earnings per share of $4.13 for the quarter. Wall Street had expected $4.27. The figure was affected by a $30 million pretax write-down related to certain investments, Reuters explains.

Investors after the publication of the statements began to sell off the stock: on Monday quotes collapsed by 8.9% - to $335.3, which was the lowest since 2023. This is the strongest daily decline since July 2024, notes The Wall Street Journal.

Domino's stock has lost nearly a third of its value over the past year. That means that the owner of 9.9% of Domino's shares, investment company Berkshire Hathaway, is probably making a loss on that investment. Berkshire owned just under 3.35 million shares at the end of the year. Berkshire, which was led by legendary investor Warren Buffett until early 2026, bought most of that stake at the end of 2024 - Barron's estimates it at between $400 and $450 a share. And in the fourth quarter of 2025, after which the "Oracle of Omaha" stepped down as CEO, Berkshire built up the position - and more actively than in other companies in that quarter. Buffett's stake in the company is now valued at about $1.1 billion, Barron's writes.

Consumers, already facing a high cost of living and a weak labor market, are under additional pressure, Reuters writes. The U.S. market is being affected by tensions in the Middle East and the resulting higher transportation costs. This increases concerns about inflation and forces people to cut back on non-essential spending, including restaurant visits, the agency explains. Consumer sentiment in March fell to COVID-19 lows as inflation influenced spending decisions, Weiner said at a conference call on the reporting results.

"Higher food and energy prices are already squeezing short-term profits, but if rising fuel prices force consumers to cut back on spending, that will be felt over the next quarter or two - which is what explains [Domino's] more cautious outlook right now," Brian Mulberry, chief market strategist at Zacks Investment Management, told Reuters.

"Domino's may have faced a more challenging U.S. market than expected. Inflation and a weakening economy, especially for lower-income consumers, have put pressure on revenue," Bruce Winder, an independent retail consultant, explained to Reuters.

In an interview with CNBC, Weiner shared that similar revenue pressures are likely to be reflected in competitors' reporting. "One of the downsides of being the first to report is you don't hear what everybody else is saying," Weiner said, noting that he expects comparable sales to decline at the Papa John's and Pizza Hut chains.

Domino's also faced stiffer competition from other pizza chains during the quarter. Papa John's and Pizza Hut responded to Domino's Best Deal Ever promotion for $9.99 with their own offerings at the same price. And Little Caesars offered a counterpart to Domino's Mix & Match menu for $6.99, dropping the price to $5.99.

Yum announced in November that it was exploring strategic options for Pizza Hut, including a possible sale, CNBC writes. And Papa John's is in talks with Qatar-backed Irth Capital about a deal to leave the stock exchange, according to media reports. Both chains have also announced plans to close hundreds of restaurants this year, which could further cement Domino's dominance in the pizza category, the network notes. And if Pizza Hut or Papa John's leaves the exchange, Weiner expects the new owner to close even more locations - which would be a win for Domino's.

Pizza chains have opened the reporting season among fast-food restaurants. Starbucks will report after the close of trading Tuesday, while Chipotle Mexican Grill and Pizza Hut owner Yum Brands are expected to report results Wednesday. Competitor Papa John's will report next Thursday.

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