Domino's faces interest rate risk from variable-rate debt, potentially increasing interest expense. Commodity price volatility, particularly for cheese and other food products, poses a risk to costs. Foreign currency exchange rate fluctuations could negatively impact international revenue. The company's substantial debt, including fixed-rate notes, exposes it to interest rate changes and refinancing risk. Litigation and legal proceedings, including potential class action suits, are also a risk.
Financial Upside
Domino's experienced global retail sales growth in Q3 2024, driven by same-store sales and store growth in both the US and internationally. Increased supply chain and US store revenues contributed to this growth. The company's franchise model, with high franchisee participation, and supply chain operations are revenue drivers. Positive unrealized gains on investments in DPC Dash contributed to income. Share repurchases and dividends are potential returns to shareholders.
