What's the hottest topic of the year for investors? That's easy: The Trump administration's trade policies. Stocks have been a virtual yo-yo depending on which way the trade policy winds have blown.
Worries about the negative impact of steep tariffs have caused the stock market to sink. The relief that came with the delay of tariffs or the striking of trade deals with tariffs that aren't too painful has caused the market to rise.
I've noticed something, though, with the recent discussion of how Trump's tariffs can help or hurt investors. Not enough people are talking about Domino's Pizza (DPZ -0.46%) right now.
Image source: Domino's Pizza.
Peace of mind for the pizza-minded
How many times were tariffs mentioned in Domino's Pizza's second-quarter earnings call in July? Zero. What about the Trump administration's trade policies? Zilch. The closest reference was a comment by the company's CFO, Sandeep Reddy: "We have not seen any material impact to date from global macro or geopolitical uncertainty."
Neither analysts nor Domino's management expressed concerns about tariffs affecting the company's business. That's because tariffs shouldn't be much of a factor for Domino's Pizza.
Domino's operates its own dough manufacturing facilities throughout the U.S. and Canada that supply fresh dough to over 7,600 stores. Its biggest third-party food cost is cheese, nearly all of which is purchased from one U.S. supplier. Most of the meat toppings in the U.S. are purchased from one U.S. supplier, too. When prices fluctuate, Domino's has been able to easily pass the higher costs or savings along to franchisees.
I think Domino's Pizza could even benefit from high tariffs. If consumers have to pay higher prices for many products, they could cut back on eating out. However, pizza is relatively cheap. Domino's routinely offers deals where a large pizza can be purchased for $10 or so. It wouldn't be surprising if the company experienced higher sales as budget-conscious consumers bought more pizza as they reduced spending on dining at more expensive restaurants.
Domino's business is resilient. The company's supply chain provides a significant competitive advantage. It boasts the largest advertising budget. CEO Russell Weiner noted in the Q2 call, "[W]hen consumers are looking for value, that's actually a big pro for us because I think we're set up."
Delivering it hot
Any tariff-resistant stock warrants consideration in the current market environment. But tariff-resistant stocks with great track records of delivering for investors deserve extra attention. Domino's Pizza falls into this category.
The company began business in 1960 with just one location. Today, Domino's is the largest pizza company in the world. It has more than 21,300 locations in over 90 global markets. Domino's Pizza is one of the most recognized brands.
Over the last 10 years, Domino's stock has more than quadrupled. The pizza giant is also outperforming the S&P 500 so far in 2025, with a gain of around 11%.
In Q2, Domino's Pizza added 178 stores worldwide. Most of these (148) were in international markets, reflecting the company's expanding global presence. Operating income jumped 14.8%. Domino's is well-positioned for sustained growth.
Even Buffett has bought a slice
Warren Buffett's Berkshire Hathaway (BRK.A -2.74%) (BRK.B -2.53%) initiated a new position in Domino's Pizza in the third quarter of 2024. The conglomerate bought more shares in the following two quarters. At the end of the first quarter of this year, Berkshire owned 7.7% of Domino's.
What's especially notable about these transactions is that Buffett has been a net seller of stocks for 10 consecutive quarters. He and his team haven't bought many stocks in recent years. Domino's Pizza is one of the exceptions. I think that's something to talk about.
