Domino's shares tumble on Meij retirement, weak trading update
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More news: Shares in Domino's Pizza Enterprises tumbled more than 4% to $32.32 in early trading after the fast food retail group announced Don Meij would retire as CEO after 22 years in the role.
The company also posted a muted trading update, with same store sales down 1.2% for the first 17 weeks.
Analysts said the CEO retirement was a surprise.
RBC Capital Markets analyst Michael Toner said the leadership change provided an opportunity for a reset and van Dyck's experience in restructuring and growing a Japanese business should provide a solid foundation. However, a turnaround in Japan and France and franchise profitability is a core prerequisite for Domino's to execute on its longer-term growth strategy.
What they said: "Overall, whilst the market had been disappointed with the performance of DMP, Mr Meij was a key figure for the franchisees ... Whilst the incoming CEO has strong credentials from the Compass Group, managing the relationship with franchisees and improving their profitability will be his key challenge," E&P retail analyst Phillip Kimber said.
Domino’s Pizza CEO Don Meij to retire
The news: Domino’s Pizza Enterprises has announced long-time chief executive and managing director Don Meij will retire effective 6 November. He will be succeeded by Mark van Dyck.
The numbers: Meij will retire after nearly 40 years at the company, with 22 of those as CEO. He will work with the board and his successor van Dyck for another 12 months.
Domino’s, which owns and operates pizza stores in Australia, Asia and Europe, also said same store sales for the first 17 weeks of this fiscal year are down 1.2%. It noted that Germany, France and Japan weighed on the result.
The context: Meij said in a statement the decision was not easy, but it was the right time to step back and for new leadership to guide the next era of growth.
The group said it had selected Meij’s successor following a global search. Van Dyck was most recently the Asia Pacific boss at food services giant Compass Group and has previously served at executive positions at Coca-Cola. He is also chair of the Food and Agriculture Taskforce.
What they said: “Under his leadership, Domino’s Pizza Enterprises grew from a Brisbane-based company to a truly global business — the market leader in each of the markets the company has operated for more than three years in Europe and Asia-Pacific,” Domino's chair Jack Cowin said.
The source: ASX announcement
