Domino’s Pizza has delivered a brutal $300m hit to investors as the fast-food giant turns its back on cheap voucher deals and closes 29 local stores.
The Aussie-led pizza chain posted its second annual loss since floating on the stock exchange two decades ago, driven by massive write-downs and failing overseas operations.
The company is wiping off losses across struggling outlets in France and Taiwan following mass store closures in Japan.
In Australia and New Zealand, 29 underperforming stores have been permanently shut.
In a statement to the ASX, executive chairman Jack Cowin said the company had completed a balance sheet review to reflect current market conditions and strategic priorities.
Investors were prepared for the financial blow following aggressive international expansion that failed to pay off.
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In Australia and New Zealand, 29 underperforming Domino’s Pizza stores have been permanently shut. Picture: NCA NewsWire / Brenton Edwards
The losses come as Domino’s pivots away from cheap promotions and bargain vouchers for Australian buyers.
Addressing shareholders, Mr Cowin vowed the chain would turn its back on discounting to focus on franchisee profits.
He highlighted that lifting the price of a pizza by just 70c significantly increases store profitability.
“The future of this company is not going to be built on the discounting or vouchering of the business,” Mr Cowin said.
Same-store sales fell 4.7 per cent across Australia and New Zealand as the strategy took effect.
Domino’s executive chairman Jack Cowin. Picture- supplied
Domino’s told the market the lower transaction numbers were a deliberate trade-off to protect store margins.
The approach has delivered early gains in Western Australia, where store earnings rose 30 per cent despite lower order volumes.
New Zealand stores recorded a 22 per cent profit increase.
The company confirmed full-year earnings guidance between $118m and $122m and promised to pay an underlying dividend.
The fast-food chain was once a darling of the Australian Stock Exchange, surging during pandemic lockdowns on the back of home delivery demand.
However, its share price has suffered a staggering fall, collapsing from a peak of more than $160 in late 2021 to about $17.
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