Domino's shares drop 10% as analysts predict downgrades to market estimates
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More news: Domino's shares tumbled in early trade after the pizza chain reported lower first-half profit and a flat interim dividend.
Domino's shares were down 10.9% to $28.75 at 11:20am AEDT, having retreated more than 30% over the last 12 months.
E&P retail analyst Phillip Kimber said he expects consensus profit estimates to decline by 5% for FY25, and by at least 5% to 10% in FY26, following the result.
Kimber believes Domino's lack of full-year guidance will lead to consensus downgrades, as well as estimates for FY26 and FY27 which assume growth on existing FY25 forecasts.
Domino's Pizza keeps dividend as earnings drop
The news: Domino’s Pizza Enterprises maintained its dividend despite a statutory loss and a 6% drop in first-half profit to $58.8 million, citing inflation and lower sales in Asia and Europe.
The numbers: Major restructuring costs linked to the previously reported closure of 205 stores led to a $22.2 million loss for the six months to December 31, 2024.
The company, which on February 7 announced the outlet closures, most of which (172) are in Japan, saw total revenue decline 6.4% to $1.17 billion.
Despite the loss, Domino’s will maintain its interim dividend at 55.5 cents per share, unchanged from the previous year but slightly lower than the 55.9 cps expected.
The company recorded $116 million in one-off charges, including $80.6 million in impairments related to store closures.
Australian operations remained strong, with EBIT rising 7.6% to $67.7 million for the half-year, while performance in France and Japan lagged.
New CEO Mark van Dyck said he had taken swift action to drive a turnaround, with future improvements expected through sales growth and tighter cost controls.
What they said: “At our recent trading update we announced the first outcomes of a detailed operational and financial review to create a simpler and better Domino’s, including taking decisive actions to close loss-making stores and deliver savings to reinvest in growth," van Dyck said.
“These results demonstrate early progress, however we have more to do to restore value for our shareholders, franchise partners, and customers – as we do so, we will be prioritising profitable Same Store Sales growth similar to other retailers, with selective store additions.”
The sources: ASX release, E&P research
