Domino’s expects Papa Johns, Pizza Hut to close more stores

CEO Russell Weiner predicts pizza competitors will see more profitability issues as they offer steep discounts to drive sales, while Domino’s franchisees continue to improve margins.

Domino’s expects to grow market share as its publicly traded rivals close stores this year, CEO Russell Weiner said Monday during an earnings call.

Earlier this year, Yum Brands, Pizza Hut’s parent company, said it would close about 250 underperforming restaurants during the first half of 2026 as part of an ongoing strategic review. Yum said in the past that it was also considering selling the brand. Papa Johns also plans to close 300 locations by the end of 2027 , with about 200 units slated to close this year.

Competitor struggles

Weiner said Domino’s long-term value strategy has been difficult for competitors to match, particularly from a profitability standpoint. As competitors continue to push steep discounts, more franchisees will see profitability issues that could lead to additional closures, Weiner added.

Domino’s has a higher advertising budget than both Papa Johns and Pizza Hut, Weiner said, and its value offers don’t come at the expense of profitability.

Despite posting a 0.9% same-store sales growth in Q1 — lower than previous expectations — Domino’s remains optimistic about the future, given the ongoing trouble at major competitors. Domino’s will continue to offer promotions, like its Best Deal Ever, which discounts a large pizza, and lean into deals that customers find valuable.

“What you're starting to see this year is competition — pizza and non-pizza — realizing they need to do the same thing,” Weiner said. “At the end of the day, what that allows us to do is not only to continue to put pressure on our competition and to continue to grow share, but also, this value environment is not going to change … for the rest of this year.”

Sales and unit growth

When competing stores close, they tend to be underperforming locations that have roughly $500,000 in annual sales volumes, Weiner said. By comparison, Domino’s franchisees averaged $26,247 in weekly sales in 2024, according to its 2026 franchise disclosure document. That adds up to over $1.3 million in average unit volume.

On average, Domino’s competitors have weaker sales volumes. Pizza Hut’s mature franchised stores had an AUV of just under $1 million in 2025, while Papa Johns’ standard U.S. stores had a roughly $1.1 million AUV.

“If I go back to 2025, [our publicly traded] competitors closed the same number of stores last year, too,” CFO Sandeep Reddy said during the call. “Our playbook has been to continue to squeeze their profits. They close doors. We take sales. We take share. What is happening in ’26 is no different.”

Domino’s said earlier this year that it expects to double its market share in the future after growing its share to 23% of QSR pizza market in recent years.

Over the past 11 years, Domino’s gained 11 points of market share by driving more sales, opening stores and driving profits per sale, Weiner said. During that time, Domino’s opened 2,000 net new stores, despite some competitors closing stores. The chain also saw average annual sales growth of over 5% and profit of average franchisees increased almost $80,000 per store. That equates to about $740 million in additional profit compared to what franchisees had over a decade ago.

“This has been, and will remain, our formula for success. More sales, more stores and more profit drive more market share. More market share drives scale, which strengthens our competitive advantage,” Weiner said.