Domino’s Pizza profits fell 13 percent in the first half of the 2024 financial year, but online sales rose nearly 12 percent.
The pizza chain’s share price rose nearly 4 percent on the Australian Stock Exchange (ASX) on Feb. 21, despite the profit fall compared to the prior corresponding half.
The Breakdown
Domino’s reported that total network sales grew 8.8 percent on the prior corresponding half to $2.1 billion. In addition, online sales surged 11.8 percent to $1.7 billion in the first half of 2024, when compared to the first half of 2023.Earnings before interest and taxes (EBIT) fell 5.3 percent to $107.9 million compared to the prior corresponding half.
This dividend will be paid to eligible shareholders on March 27, with an ex-dividend date of Feb. 26.
Domino’s reported to the market that it has started to rebuild sales, earnings, and franchise profit across its local and international operations.
The Domino’s share price is up nearly 3.61 percent at the time of writing to $41.03. In the past year, Domino’s shares have descended 42.5 percent. In earlier trade on Feb. 21, Domino’s shares surged 4.8 percent to $41.58.
The company also provided a trading update for the first seven weeks of the second half of the 2024 financial year. Network sales have grown 3.78 percent, while same-store sales have risen 2.96 percent.
There have been seven new store openings in this time frame compared to 15 in the prior corresponding period.
Domino’s Rebuilding: CEO
Group CEO and managing director, Don Meij, said the results on Feb. 21, show Domino’s rebuilding and its sales initiatives in Australia and New Zealand were gaining traction internationally.He said the results also show more work is required to get the same results in all 12 of the company’s markets, which include Japan, Singapore, France, Germany, and The Netherlands.
“The past 12 months have reinforced the importance of launching inspired new products, designed for delivery, to give customers more choice on more occasions—whether it’s a family bundle, a lunchtime offering, or an on-the-go snack.
The Performance Overseas
Mr. Meij signaled more work is required to strike the balance in some of the company’s international markets, including France.He noted trading conditions are challenging in Asia, but the company has seen improvement in Japan, including sales growth in the first seven weeks of 2024.
Despite navigating “record inflation” impacting customer spending choices, Domino’s said it has been working in all markets to grow weekly customer counts and franchise partner profits in the company.
In the Australia and New Zealand markets, Domino’s said more than half of its stores boosted trading hours to meet lunchtime and late-night order demands. This is especially true in the case of delivery via Domino’s service or Uber.
The company said delivery growth had “more than offset” a decline in carry out-orders. This week, the company launched a $5 or less range in Australia and New Zealand.
In the European market, Domino’s is placing a major focus on France, where delivery orders are now growing. However, there has been a fall in carry-out, cutting the company’s customer counts.
The Japanese market was the largest in Asia, where customers have grown with successful promotions. Other Asian markets had a “mixed performance.”
Singapore has been delivering more growth since the company implemented the online ordering platform One Digital.
However, the Malaysian business is experiencing headwinds at the moment, which Domino’s described as temporary, due to “geopolitical issues.”
What is Ahead?
Domino’s is undertaking a wide-ranging company restructuring plan that is expected to deliver $50 million in savings in the 2024 financial year. One-third of these savings will be provided to franchise partners.Looking ahead to 2024, the company’s CEO said Domino’s would implement a “proven strategy” to rebuild weekly customer counts, and franchise partner profit.
“As we work to serve our customers across different countries, cultures, and taste preferences, our customers share a common desire for high-quality meals, delivered fast, at an affordable price. We believe Domino’s is well placed for this future, and we will work hard to deliver,” he said.
