Domino’s Pizza Enterprises said its first-half net profit fell 21.5 per cent, as orders were impacted by the impact of inflation on consumer spending.
The Australian franchise of Domino’s says its first-half profit attributable for the period ended Jan 1 was $71.7 million on global sales of $1.97 million, which were down 4 per cent, but up 1.2 per cent after excluding the impact of foreign exchange.
Domino’s said margins were affected by lower-than-anticipated sales and the flow-on effect on corporate stores and warehouse earnings.
Shares of the company sunk as much as 24.3 per cent on Wednesday, a record drop for the ASX-listed business.
A focus on the Value Equation will help deliver Domino’s Pizza profits
Group CEO and managing director Don Meij said management recognised the company’s response to combating inflation had not been optimal in the first half but is confident in Domino’s strategy and people in growing order volumes, total sales, and earnings in the second half of the financial year.
“At Domino’s we talk about the Value Equation’ and are completely obsessed with getting this right, which in turn will deliver for our customers, our franchisees and our shareholders,” Meij said
During the half, Domino’s acquired the master franchise rights in Singapore and Malaysia, marking its 11th and 12th international markets and adding 278 stores to its global network.
The company said it remains on track to deliver significant network expansion this year.
- Last year Domino’s opened more restaurants in Australia than any other fast food chain. A total of 34 new outlets joined the pizza portfolio.
- In December 2022 DPE spent $150 million to complete its acquisition of the joint venture business in Germany.
- DPE appointed a new CIO in January to help drive the brand’s growth. The pizza business announced late last year it plans to open a further 40 stores in FY23. Longer term the expansion target is to reach a footprint of 1000 outlets in 2024.