DOMINOS PIZZA INC

Previous wording

The 2025 and 2024 second quarters referenced herein represent the twelve-week periods ended June 15, 2025 and June 16, 2024, respectively. The 2025 and 2024 two fiscal quarters referenced herein represent the twenty-four-week periods ended June 15, 2025 and June 16, 2024, respectively. In this section, we discuss the results of our operations for the second quarter and two fiscal quarters of 2025 as compared to the second quarter and two fiscal quarters of 2024.

Current wording

The 2025 and 2024 third quarters referenced herein represent the twelve-week periods ended September 7, 2025 and September 8, 2024, respectively. The 2025 and 2024 three fiscal quarters referenced herein represent the thirty-six-week periods ended September 7, 2025 and September 8, 2024, respectively. In this section, we discuss the results of our operations for the third quarter and three fiscal quarters of 2025 as compared to the third quarter and three fiscal quarters of 2024.

Previous wording

Domino’s is the largest pizza company in the world, with more than 21,500 locations in over 90 markets around the world as of June 15, 2025, and operates two distinct service models within its stores with a significant business in both delivery and carryout. We are a highly recognized global brand, and we focus on value while serving neighborhoods locally through our large worldwide network of franchise owners and U.S. Company-owned stores through both the delivery and carryout service models. We have been selling quality, affordable food to our customers since 1960. We became “Domino’s Pizza” in 1965 and opened our first franchised store in 1967. Over more than 60 years, we have built Domino’s into one of the most widely-recognized consumer brands in the world. We believe our commitment to value, convenience, quality and new products continues to keep consumers engaged with the brand.

Current wording

Domino’s is the largest pizza company in the world, with more than 21,700 locations in over 90 markets around the world as of September 7, 2025, and operates two distinct service models within its stores with a significant business in both delivery and carryout. We are a highly recognized global brand, and we focus on value while serving neighborhoods locally through our large worldwide network of franchise owners and U.S. Company-owned stores through both the delivery and carryout service models. We have been selling quality, affordable food to our customers since 1960. We became “Domino’s Pizza” in 1965 and opened our first franchised store in 1967. Over more than 60 years, we have built Domino’s into one of the most widely-recognized consumer brands in the world. We believe our commitment to value, convenience, quality and new products continues to keep consumers engaged with the brand.

Previous wording

Two Fiscal Quarters of 2025 Highlights

Current wording

Third Quarter of 2025 Highlights

Previous wording

Global retail sales, excluding foreign currency impact (which includes total retail sales at Company-owned and franchised stores worldwide), increased 5.6% as compared to the second quarter of 2024. U.S. retail sales increased 5.1% and international retail sales, excluding foreign currency impact, increased 6.0% as compared to the second quarter of 2024. Same store sales increased 3.4% in our U.S. stores and increased 2.4% in our international stores (excluding foreign currency impact).

Current wording

Global retail sales, excluding foreign currency impact (which includes total retail sales at Company-owned and franchised stores worldwide), increased 6.3% as compared to the third quarter of 2024. U.S. retail sales increased 7.0% and international retail sales, excluding foreign currency impact, increased 5.7% as compared to the third quarter of 2024. Same store sales increased 5.2% in our U.S. stores and increased 1.7% in our international stores (excluding foreign currency impact).

Previous wording

Global net store growth of 178, including 30 net store openings in the U.S. and 148 net store openings internationally.

Current wording

Global net store growth of 214, including 29 net store openings in the U.S. and 185 net store openings internationally.

Previous wording

Second Quarter of 2025 Highlights

Current wording

Three Fiscal Quarters of 2025 Highlights

Previous wording

Global retail sales, excluding foreign currency impact (which includes total retail sales at Company-owned and franchised stores worldwide), increased 5.1% as compared to the two fiscal quarters of 2024. U.S. retail sales increased 3.2% and international retail sales, excluding foreign currency impact, increased 7.1% as compared to the two fiscal quarters of 2024. Same store sales increased 1.4% in our U.S. stores and increased 3.0% in our international stores (excluding foreign currency impact).

Current wording

Global retail sales, excluding foreign currency impact (which includes total retail sales at Company-owned and franchised stores worldwide), increased 5.5% as compared to the three fiscal quarters of 2024. U.S. retail sales increased 4.5% and international retail sales, excluding foreign currency impact, increased 6.6% as compared to the three fiscal quarters of 2024. Same store sales increased 2.7% in our U.S. stores and increased 2.5% in our international stores (excluding foreign currency impact).

Previous wording

Global net store growth of 170, including 47 net store openings in the U.S. and 123 net store openings internationally.

Current wording

Global net store growth of 384, including 76 net store openings in the U.S. and 308 net store openings internationally.

Previous wording

Excluding the negative impact of foreign currency, Domino’s experienced global retail sales growth during the second quarter and two fiscal quarters of 2025, driven by same store sales growth, as well as net store growth during the trailing four quarters in both our U.S. and international businesses. Overall, we believe our global retail sales growth, excluding foreign currency impact, marketing initiatives, operations and emphasis on technology have combined to strengthen our brand. These financial and statistical measures are described in additional detail below.

Current wording

Excluding the positive and negative impacts of foreign currency during the third quarter and three fiscal quarters of 2025, respectively, Domino’s experienced global retail sales growth, driven by same store sales growth, as well as net store growth during the trailing four quarters in both our U.S. and international businesses. Overall, we believe our global retail sales growth, excluding foreign currency impact, marketing initiatives, operations and emphasis on technology have combined to strengthen our brand. These financial and statistical measures are described in additional detail below.

Previous wording

U.S. same store sales increased 3.4% in the second quarter of 2025, rolling over an increase in U.S. same store sales of 4.8% in the second quarter of 2024. U.S. same store sales increased 1.4% in the two fiscal quarters of 2025, rolling over an increase in U.S. same store sales of 5.2% in the two fiscal quarters of 2024. The increase in U.S. same store sales in the second quarter of 2025 was driven by higher customer transaction counts and an increase in average ticket, each driven in part by the launch of our Parmesan Stuffed Crust in the U.S. The increase in U.S. same store sales in the two fiscal quarters of 2025 was driven by an increase in average ticket. International same store sales (excluding foreign currency impact) increased 2.4% in the second quarter of 2025, rolling over an increase in international same store sales (excluding foreign currency impact) of 2.1% in the second quarter of 2024. International same store sales (excluding foreign currency impact) increased 3.0% in the two fiscal quarters of 2025, rolling over an increase in international same store sales (excluding foreign currency impact) of 1.5% in the two fiscal quarters of 2024. The increases in international same store sales in both the second quarter and two fiscal quarters of 2025 were driven by higher customer transaction counts.

Current wording

U.S. same store sales increased 5.2% in the third quarter of 2025, rolling over an increase in U.S. same store sales of 3.0% in the third quarter of 2024. U.S. same store sales increased 2.7% in the three fiscal quarters of 2025, rolling over an increase in U.S. same store sales of 4.5% in the three fiscal quarters of 2024. The increase in U.S. same store sales in the third quarter of 2025 was primarily due to higher customer transaction counts, driven in part by our “Best Deal Ever” promotion. To a lesser extent, the increase in U.S. same store sales in the third quarter of 2025 was also driven by an increase in average ticket. The increase in U.S. same store sales in the three fiscal quarters of 2025 was due to both higher average ticket and higher customer transaction counts, each driven in part by the launch of our Parmesan Stuffed Crust. Multiple windows of our “Best Deal Ever” promotion also drove higher customer transaction counts in the three fiscal quarters of 2025.

Previous wording

Consolidated revenues increased $47.4 million, or 4.3%, in the second quarter of 2025 as compared to the second quarter of 2024, and consolidated revenues increased $74.8 million, or 3.4%, in the two fiscal quarters of 2025 as compared to the two fiscal quarters of 2024, primarily due to higher supply chain revenues, higher U.S. franchise royalties and fees and higher U.S. franchise advertising revenues. The increase in supply chain revenues was primarily attributable to an increase in our food basket pricing as well as higher order volumes, but was partially offset by a shift in the relative mix of products we sell and the transition of our equipment and supplies business to a third-party supplier. The increases in U.S. franchise royalties and fees and U.S. franchise advertising revenues were driven primarily by same store sales growth and net store growth during the trailing four quarters. U.S. franchise advertising revenues also increased as a result of a decrease in advertising incentives related to certain brand promotions and the increase in the advertising contribution rate in the two fiscal quarters of 2025. These changes in revenues are described in more detail below.

Current wording

Consolidated revenues increased $66.9 million, or 6.2%, in the third quarter of 2025 as compared to the third quarter of 2024, and consolidated revenues increased $141.8 million, or 4.3%, in the three fiscal quarters of 2025 as compared to the three fiscal quarters of 2024, primarily due to higher supply chain revenues and higher U.S. franchise royalties and fees and advertising revenues. The increase in supply chain revenues was primarily attributable to higher order volumes and an increase in our food basket pricing to stores, but these increases were partially offset by a shift in the relative mix of products we sell and the transition of our equipment and supplies business to a third-party supplier. The increases in U.S. franchise royalties and fees and advertising revenues were driven primarily by same store sales growth and net store growth during the trailing four quarters. U.S. franchise advertising revenues also increased as a result of a decrease in advertising incentives related to certain brand promotions and the increase in the advertising contribution rate in the three fiscal quarters of 2025. These changes in revenues are described in more detail below.

Previous wording

Revenues from U.S. Company-owned store operations increased $0.2 million, or 0.2%, in the second quarter of 2025 primarily due to higher same store sales, but this increase was offset by the refranchising of 36 stores in the Maryland market in May of 2025. Revenues from U.S. Company-owned store operations decreased $0.8 million, or 0.5%, in the two fiscal quarters of 2025 primarily due to the refranchising of 36 stores in the Maryland market.

Current wording

Revenues from U.S. Company-owned store operations decreased $6.5 million, or 7.2%, in the third quarter of 2025, and decreased $7.3 million, or 2.7%, in the three fiscal quarters of 2025, each primarily driven by the refranchising of 36 stores in the Maryland market in May of 2025, but these decreases were partially offset by higher same store sales.

Previous wording

U.S. Company-owned same store sales increased 2.6% in the second quarter of 2025 and increased 4.5% in the second quarter of 2024. U.S. Company-owned same store sales declined 0.2% in the two fiscal quarters of 2025 and increased 6.5% in the two fiscal quarters of 2024.

Current wording

U.S. Company-owned same store sales increased 3.4% in the third quarter of 2025 and increased 3.1% in the third quarter of 2024. U.S. Company-owned same store sales increased 1.0% in the three fiscal quarters of 2025 and increased 5.4% in the three fiscal quarters of 2024.

Previous wording

Revenues from U.S. franchise royalties and fees increased $8.7 million, or 5.9%, in the second quarter of 2025, and increased $9.2 million, or 3.1%, in the two fiscal quarters of 2025, primarily due to higher same store sales and an increase in the average number of U.S. franchised stores open during the period resulting from net store growth.

Current wording

Revenues from U.S. franchise royalties and fees increased $13.1 million, or 9.1%, in the third quarter of 2025, and increased $22.2 million, or 5.0%, in the three fiscal quarters of 2025, primarily due to higher same store sales and an increase in the average number of U.S. franchised stores open during the period resulting from net store growth.

Previous wording

U.S. franchise same store sales increased 3.4% in the second quarter of 2025 and increased 4.8% in the second quarter of 2024. U.S. franchise same store sales increased 1.5% in the two fiscal quarters of 2025 and increased 5.2% in the two fiscal quarters of 2024.

Current wording

U.S. franchise same store sales increased 5.3% in the third quarter of 2025 and increased 3.0% in the third quarter of 2024. U.S. franchise same store sales increased 2.7% in the three fiscal quarters of 2025 and increased 4.4% in the three fiscal quarters of 2024.

Previous wording

Revenues from U.S. franchise advertising increased $7.2 million, or 5.8%, in the second quarter of 2025 primarily as a result of higher same stores sales and an increase in the average number of U.S. franchised stores open during the period resulting from net store growth. Revenues from U.S. franchise advertising increased $20.9 million, or 8.9%, in the two fiscal quarters of 2025 primarily due to a decrease in advertising incentives related to certain brand promotions, the return to the standard 6.0% advertising contribution rate at the beginning of the second quarter of 2024 following the end of the temporary reduction to 5.75%, an increase in the average number of U.S. franchised stores open during the period resulting from net store growth and higher same store sales.

Current wording

Revenues from U.S. franchise advertising increased $10.7 million, or 8.9%, in the third quarter of 2025 primarily as a result of higher same stores sales and an increase in the average number of U.S. franchised stores open during the period resulting from net store growth. Revenues from U.S. franchise advertising increased $31.6 million, or 8.9%, in the three fiscal quarters of 2025 primarily due to higher same store sales, a decrease in advertising incentives related to certain brand promotions, an increase in the average number of U.S. franchised stores open during the period resulting from net store growth, as well as the return to the standard 6.0% advertising contribution rate at the beginning of the second quarter of 2024 following the end of the temporary reduction to 5.75%.

Previous wording

Supply chain revenues increased $27.8 million, or 4.2%, in the second quarter of 2025, and increased $38.5 million, or 2.9%, in the two fiscal quarters of 2025, each due to an increase in our food basket pricing to stores, as well as higher order volumes. These increases were partially offset by a shift in the relative mix of products we sell and the transition of our equipment and supplies business to a third-party supplier. Our food basket pricing to stores increased 4.8% in both the second quarter of 2025 and two fiscal quarters of 2025, which resulted in an estimated $45 million increase in supply chain revenues in the second quarter of 2025, and an estimated $82 million increase in the two fiscal quarters of 2025. The food basket pricing change, a statistical measure utilized by management, is calculated as the percentage change of the food basket (including both food and cardboard products) purchased by an average U.S. store (based on average weekly unit sales) from our U.S. supply chain centers against the comparable period of the prior year. We believe this measure is important to understanding Company performance because as our food basket prices fluctuate, our revenues, cost of sales and gross margin percentages in our supply chain segment also fluctuate.

Current wording

Supply chain revenues increased $45.6 million, or 7.0%, in the third quarter of 2025, and increased $84.2 million, or 4.3%, in the three fiscal quarters of 2025, each due to higher order volumes and an increase in our food basket pricing to stores. These increases were partially offset by a shift in the relative mix of products we sell and the transition of our equipment and supplies business to a third-party supplier. Our food basket pricing to stores increased 3.3% in the third quarter of 2025 and increased 4.3% in the three fiscal quarters of 2025, which resulted in an estimated $33 million increase in supply chain revenues in the third quarter of 2025, and an estimated $115 million increase in the three fiscal quarters of 2025. The food basket pricing change, a statistical measure utilized by management, is calculated as the percentage change of the food basket (including both food and cardboard products) purchased by an average U.S. store (based on average weekly unit sales) from our U.S. supply chain centers against the comparable period of the prior year. We believe this measure is important to understanding Company performance because as our food basket prices fluctuate, our revenues, cost of sales and gross margin percentages in our supply chain segment also fluctuate.

Previous wording

Revenues from international franchise royalties and fees increased $3.5 million, or 4.7%, in the second quarter of 2025, and increased $7.1 million, or 4.8% in the two fiscal quarters of 2025, primarily due to an increase in the average number of international franchised stores open during the period resulting from net store growth and same store sales growth (excluding foreign currency impact), but these increases were partially offset by the negative impact of changes in foreign currency exchange rates of approximately $0.2 million in the second quarter of 2025 and $3.4 million in the two fiscal quarters of 2025. The impact of changes in foreign currency exchange rates on international franchise royalty revenues, a statistical measure utilized by management, is calculated as the difference in international franchise royalty revenues resulting from translating current year local currency results to U.S. dollars at current year exchange rates as compared to prior year exchange rates. We believe this measure is important to understanding Company performance given the significant variability in international franchise royalty revenues that can be driven by changes in foreign currency exchange rates.

Current wording

Revenues from international franchise royalties and fees increased $3.9 million, or 5.2%, in the third quarter of 2025, and increased $11.0 million, or 5.0%, in the three fiscal quarters of 2025, primarily due to an increase in the average number of international franchised stores open during the period resulting from net store growth, as well as same store sales growth (excluding foreign currency impact). Changes in foreign currency exchange rates had an impact on international franchise royalty revenues of approximately positive $0.8 million in the third quarter of 2025 and negative $2.6 million in the three fiscal quarters of 2025. The impact of changes in foreign currency exchange rates on international franchise royalty revenues, a statistical measure utilized by management, is calculated as the difference in international franchise royalty revenues resulting from translating current year local currency results to U.S. dollars at current year exchange rates as compared to prior year exchange rates. We believe this measure is important to understanding Company performance given the significant variability in international franchise royalty revenues that can be driven by changes in foreign currency exchange rates.

Previous wording

International franchise same store sales increased 2.4% in the second quarter of 2025 and increased 2.1% in the second quarter of 2024, each excluding the impact of foreign currency exchange rates. International franchise same store sales increased 3.0% in the two fiscal quarters of 2025 and increased 1.5% in the two fiscal quarters of 2024, each excluding the impact of foreign currency exchange rates.

Current wording

International franchise same store sales increased 1.7% in the third quarter of 2025 and increased 0.8% in the third quarter of 2024, each excluding the impact of foreign currency exchange rates. International franchise same store sales increased 2.5% in the three fiscal quarters of 2025 and increased 1.1% in the three fiscal quarters of 2024, each excluding the impact of foreign currency exchange rates.

Previous wording

Consolidated cost of sales consists of U.S. Company-owned store and supply chain costs incurred to generate related revenues. Components of consolidated cost of sales primarily include food and labor costs, as well as other costs including delivery, occupancy costs (including rent, telephone, utilities and depreciation) and insurance expense. Consolidated gross margin (which we define as revenues less cost of sales) increased $24.0 million, or 5.5%, in the second quarter of 2025, and increased $45.2 million, or 5.3%, in the two fiscal quarters of 2025, due primarily to higher global franchise royalty revenues as discussed above, as well as gross margin dollar growth within supply chain, discussed below. Franchise revenues do not have a cost of sales component, so changes in these revenues have a disproportionate effect on gross margin. Additionally, as food basket prices fluctuate, revenues, cost of sales and gross margin percentages in our supply chain segment also fluctuate, and further, cost of sales, gross margins and gross margin percentages for our U.S. Company-owned stores also fluctuate.

Current wording

Consolidated cost of sales consists of U.S. Company-owned store and supply chain costs incurred to generate related revenues. Components of consolidated cost of sales primarily include food and labor costs, as well as other costs including delivery, occupancy costs (including rent, telephone, utilities and depreciation) and insurance expense. Consolidated gross margin (which we define as revenues less cost of sales) increased $36.2 million, or 8.5%, in the third quarter of 2025, and increased $81.4 million, or 6.3%, in the three fiscal quarters of 2025, due primarily to higher global franchise royalty revenues as discussed above, as well as gross margin dollar growth within supply chain, discussed below. Franchise revenues do not have a cost of sales component, so changes in these revenues have a disproportionate effect on gross margin. Additionally, as food basket prices fluctuate, revenues, cost of sales and gross margin percentages in our supply chain segment also fluctuate, and further, cost of sales, gross margins and gross margin percentages for our U.S. Company-owned stores also fluctuate.

Previous wording

As a percentage of revenues, consolidated gross margin increased 0.5 percentage points to 40.3% in the second quarter of 2025 from 39.8% in the second quarter of 2024. Consolidated gross margin, as a percentage of revenues, increased 0.7 percentage points to 40.1% in the two fiscal quarters of 2025 from 39.4% in the two fiscal quarters of 2024. U.S. Company-owned store gross margin decreased 2.0 and 1.7 percentage points in the second quarter and two fiscal quarters of 2025, respectively. Supply chain gross margin increased 0.5 percentage points in both the second quarter and two fiscal quarters of 2025. Changes in the significant components of gross margin are described in more detail below.

Current wording

Consolidated gross margin, as a percentage of revenues, increased 0.9 percentage points to 40.1% in the third quarter of 2025 from 39.2% in the third quarter of 2024. Consolidated gross margin, as a percentage of revenues, increased 0.8 percentage points to 40.1% in the three fiscal quarters of 2025 from 39.3% in the three fiscal quarters of 2024. U.S. Company-owned store gross margin decreased 0.5 and 1.3 percentage points in the third quarter and three fiscal quarters of 2025, respectively. Supply chain gross margin increased 0.7 and 0.6 percentage points in the third quarter and three fiscal quarters of 2025, respectively. Changes in the significant components of gross margin are described in more detail below.

Previous wording

U.S. Company-owned store gross margin (which does not include certain store-level costs such as royalties and advertising) decreased $1.8 million, or 11.2%, in the second quarter of 2025 and decreased $3.3 million, or 10.3%, in the two fiscal quarters of 2025. As a percentage of store revenues, U.S. Company-owned store gross margin decreased 2.0 percentage points in the second quarter of 2025 and decreased 1.7 percentage points in the two fiscal quarters of 2025. These changes in gross margin as a percentage of revenues are discussed in additional detail below.

Current wording

U.S. Company-owned store gross margin (which does not include certain store-level costs such as royalties and advertising) decreased $1.5 million, or 9.9%, in the third quarter of 2025, and decreased $4.8 million, or 10.1%, in the three fiscal quarters of 2025. As a percentage of store revenues, U.S. Company-owned store gross margin decreased 0.5 percentage points in the third quarter of 2025, and decreased 1.3 percentage points in the three fiscal quarters of 2025. These changes in gross margin as a percentage of revenues are discussed in additional detail below.

Previous wording

Food costs increased 1.0 percentage point to 29.5% in the second quarter of 2025 and increased 1.0 percentage point to 29.6% in the two fiscal quarters of 2025. These increases were primarily driven by the increase in the food basket pricing to stores.

Current wording

Food costs increased 0.7 percentage points to 29.7% in the third quarter of 2025 and increased 0.8 percentage points to 29.6% in the three fiscal quarters of 2025, each driven by the increase in the food basket pricing to stores.

Previous wording

Labor costs decreased 1.0 percentage point to 29.9% in the second quarter of 2025 and decreased 0.5 percentage points to 30.9% in the two fiscal quarters of 2025. These decreases were primarily due to sales leverage in the second quarter of 2025 and store level productivity in the two fiscal quarters of 2025.

Current wording

Labor costs decreased 0.2 percentage points to 30.9% in the third quarter of 2025 and decreased 0.4 percentage points to 30.9% in the three fiscal quarters of 2025, each due to sales leverage, but were partially offset by higher wage rates. Store level productivity also contributed to the improvement in labor costs in the three fiscal quarters of 2025.

Previous wording

Higher insurance costs contributed to the remaining decrease in U.S. Company-owned store gross margin as a percentage of revenues.

Current wording

Higher insurance costs contributed to the remaining decrease in U.S. Company-owned store gross margin as a percentage of revenues in the three fiscal quarters of 2025.

Previous wording

Supply chain gross margin increased $6.4 million, or 8.5%, in the second quarter of 2025, and increased $11.5 million, or 7.7%, in the two fiscal quarters of 2025. As a percentage of supply chain revenues, supply chain gross margin increased 0.5 percentage points in both the second quarter and two fiscal quarters of 2025. These changes in gross margin as a percentage of revenues are discussed in additional detail below.

Current wording

Supply chain gross margin increased $10.0 million, or 14.3%, in the third quarter of 2025, and increased $21.4 million, or 9.8%, in the three fiscal quarters of 2025. As a percentage of supply chain revenues, supply chain gross margin increased 0.7 percentage points in the third quarter of 2025, and increased 0.6 percentage points in the three fiscal quarters of 2025. These changes in gross margin as a percentage of revenues are discussed in additional detail below.

Previous wording

Food costs decreased 0.1 percentage points to 71.0% in the second quarter of 2025 and decreased 0.5 percentage points to 70.7% in the two fiscal quarters of 2025, driven primarily by procurement productivity, partially offset by the increase in the cost of our food basket.

Current wording

Food costs decreased 0.3 percentage points to 71.1% in the third quarter of 2025 and decreased 0.5 percentage points to 70.8% in the three fiscal quarters of 2025, each driven primarily by procurement productivity, partially offset by the increase in the cost of our food basket.

Previous wording

Labor costs decreased 0.7 percentage points to 8.7% in the second quarter of 2025 and decreased 0.4 percentage points to 9.0% in the two fiscal quarters of 2025, primarily due to higher sales leverage and labor efficiency.

Current wording

Labor costs decreased 0.3 percentage points to 8.9% in the third quarter of 2025 and decreased 0.4 percentage points to 8.9% in the three fiscal quarters of 2025, primarily due to higher sales leverage and labor efficiency.

Previous wording

Higher insurance costs partially offset these improvements in supply chain gross margin as a percentage of revenues.

Current wording

Higher insurance costs partially offset these improvements in supply chain gross margin as a percentage of revenues in the three fiscal quarters of 2025.

Previous wording

General and administrative expenses decreased $8.3 million, or 7.2%, in the second quarter of 2025 primarily due to expenses related to our Worldwide Rally in the second quarter of 2024 that takes place every two years, which did not reoccur in 2025. General and administrative expenses decreased $0.3 million, or 0.1%, in the two fiscal quarters of 2025 primarily due to expenses related to our Worldwide Rally in the second quarter of 2024, as discussed above, but this decrease was partially offset by approximately $5 million in severance expenses associated with an organizational realignment that took place in the first quarter of 2025.

Current wording

General and administrative expenses increased $1.1 million, or 1.1%, in the third quarter of 2025. General and administrative expenses increased $0.8 million, or 0.3%, in the three fiscal quarters of 2025, primarily due to approximately $5 million in severance expenses associated with an organizational realignment that took place in the first quarter of 2025, offset by expenses related to our Worldwide Rally in the second quarter of 2024, which takes place every two years and did not reoccur in 2025.

Previous wording

U.S. franchise advertising expenses increased $7.2 million, or 5.8%, in the second quarter of 2025, and increased $20.9 million, or 8.9%, in the two fiscal quarters of 2025, consistent with the increase in U.S. franchise advertising revenues, as discussed above. U.S. franchise advertising costs are accrued and expensed when the related U.S. franchise advertising revenues are recognized, as our consolidated not-for-profit advertising fund is obligated to expend such revenues on advertising and other activities that promote the Domino’s brand, and these revenues cannot be used for general corporate purposes.

Current wording

U.S. franchise advertising expenses increased $10.7 million, or 8.9%, in the third quarter of 2025, and increased $31.6 million, or 8.9%, in the three fiscal quarters of 2025, consistent with the increase in U.S. franchise advertising revenues, as discussed above. U.S. franchise advertising costs are accrued and expensed when the related U.S. franchise advertising revenues are recognized, as our consolidated not-for-profit advertising fund is obligated to expend such revenues on advertising and other activities that promote the Domino’s brand, and these revenues cannot be used for general corporate purposes.

Previous wording

During the second quarter of 2025, we refranchised 36 U.S. Company-owned stores in Maryland for net proceeds of $8.5 million. The pre-tax refranchising gain associated with the sale of the related assets and liabilities, including a $1.4 million reduction in goodwill, was $3.9 million and was recorded in refranchising gain in our condensed consolidated statements of income.

Current wording

During the second quarter of 2025, we refranchised 36 U.S. Company-owned stores in Maryland for net proceeds of $8.5 million. The pre-tax refranchising gain associated with the sale of the related assets and liabilities, including a $1.4 million reduction in goodwill, was $3.9 million and was recorded in refranchising (gain) loss in our condensed consolidated statements of income.

Previous wording

During each of the first and second quarters of 2024, we refranchised one U.S. Company-owned store for proceeds of less than $0.1 million each. The pre-tax refranchising loss associated with the sale of the related assets and liabilities, including goodwill, were approximately $0.1 million each and were recorded in refranchising loss in our condensed consolidated statements of income.

Current wording

During each of the first and second quarters of 2024, we refranchised one U.S. Company-owned store for proceeds of less than $0.1 million each. The pre-tax refranchising loss associated with the sale of the related assets and liabilities, including goodwill, were approximately $0.1 million each and were recorded in refranchising (gain) loss in our condensed consolidated statements of income.

Previous wording

During the second quarter and two fiscal quarters of 2025, we recorded a total net $16.0 million pre-tax realized and unrealized loss and a total net $8.1 million pre-tax realized and unrealized gain, respectively, on our investment in DPC Dash (refer to Note 5 of the condensed consolidated financial statements). During the second quarter and two fiscal quarters of 2024, we recorded an $11.4 million pre-tax unrealized gain and a $7.3 million pre-tax unrealized loss, respectively, on our investment in DPC Dash. The recorded amount of our investment is based on the active exchange quoted price for the equity security.

Current wording

During the third quarter and three fiscal quarters of 2025, we recorded a total net $3.0 million pre-tax unrealized loss and a total net $5.0 million pre-tax realized and unrealized gain, respectively, on our investment in DPC Dash (refer to Note 5 of the condensed consolidated financial statements). During the third quarter and three fiscal quarters of 2024, we recorded a $26.2 million and an $18.9 million pre-tax unrealized gain, respectively, on our investment in DPC Dash. The recorded amount of our investment is based on the active exchange quoted price for the equity security.

Previous wording

Interest expense, net increased $0.3 million, or 0.8%, in the second quarter of 2025, and decreased $0.2 million, or 0.2%, in the two fiscal quarters of 2025.

Current wording

Interest expense, net increased $0.6 million, or 1.4%, in the third quarter of 2025, and increased $0.4 million, or 0.3%, in the three fiscal quarters of 2025.

Previous wording

Our weighted average borrowing rate was 3.8% in each of the second quarters and two fiscal quarters of 2025 and 2024.

Current wording

Our weighted average borrowing rate was 3.8% in each of the third quarters and three fiscal quarters of 2025 and 2024.

Previous wording

Provision for income taxes increased $12.1 million, or 48.5%, in the second quarter of 2025 due to a higher effective tax rate. The effective tax rate increased to 22.1% during the second quarter of 2025 as compared to 15.0% in the second quarter of 2024, driven primarily by a 6.8 percentage point unfavorable change in the impact of excess tax benefits from equity-based compensation.

Current wording

Provision for income taxes increased $2.2 million, or 5.8%, in the third quarter of 2025 due to a higher effective tax rate. The effective tax rate increased to 22.3% during the third quarter of 2025 as compared to 20.4% in the third quarter of 2024.

Previous wording

Provision for income taxes increased $31.2 million, or 63.9% in the two fiscal quarters of 2025 due to a higher effective tax rate, as well as higher income before provision for income taxes. The effective tax rate increased to 22.2% during the two fiscal quarters of 2025 as compared to 15.4% in the two fiscal quarters of 2024, driven primarily by a 5.7 percentage point unfavorable change in the impact of excess tax benefits from equity-based compensation.

Current wording

Provision for income taxes increased $33.4 million, or 38.6%, in the three fiscal quarters of 2025 due to a higher effective tax rate, as well as higher income before provision for income taxes. The effective tax rate increased to 22.2% during the three fiscal quarters of 2025 as compared to 17.3% in the three fiscal quarters of 2024, driven primarily by a 3.8 percentage point unfavorable change in the impact of excess tax benefits from equity-based compensation.

Previous wording

U.S. stores Segment Income increased $4.5 million, or 3.5%, in the second quarter of 2025, primarily due to higher U.S. franchise royalties and fees revenues, as discussed above. This increase was partially offset by the $1.8 million decrease in U.S. Company-owned store gross margin, as discussed above. U.S. stores Segment Income increased $0.2 million, or 0.1%, in the two fiscal quarters of 2025, primarily due to higher U.S. franchise royalties and fees revenues, but this increase was offset by the $3.3 million decrease in U.S. Company-owned store gross margin, as discussed above, as well as a shift in the relative mix of labor cost associated with internally developed software.

Current wording

U.S. stores Segment Income increased $7.7 million, or 6.0%, in the third quarter of 2025, primarily due to higher U.S. franchise royalties and fees revenues, as discussed above. This increase was partially offset by the $1.5 million decrease in U.S. Company-owned store gross margin, as discussed above. U.S. stores Segment Income increased $7.9 million, or 2.0%, in the three fiscal quarters of 2025, primarily due to higher U.S. franchise royalties and fees revenues, but this increase was partially offset by the $4.8 million decrease in U.S. Company-owned store gross margin, as discussed above, as well as a shift in the relative mix of labor cost associated with internally developed software.

Previous wording

Supply chain Segment Income increased $9.2 million, or 14.2%, in the second quarter of 2025, primarily due to the $6.4 million increase in supply chain gross margin discussed above. Supply chain Segment Income increased $17.5 million, or 13.5%, in the two fiscal quarters of 2025, primarily due to the $11.5 million increase in supply chain gross margin discussed above.

Current wording

Supply chain Segment Income increased $9.0 million, or 14.7%, in the third quarter of 2025, primarily due to the $10.0 million increase in supply chain gross margin discussed above. Supply chain Segment Income increased $26.5 million, or 13.9%, in the three fiscal quarters of 2025, primarily due to the $21.4 million increase in supply chain gross margin discussed above.