Domino's Pizza shares rise despite posting profit and dividend cut
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More news: Shares in Domino's Pizza rose more than 2% by $40.48 at 1:40pm AEDT.
Earlier in the day, the restaurant chain released its half-year results which showed a 10% fall in net profit compared to the prior corresponding period. The US group also reduced its interim dividend from 67.4 to 55.5 cents per share.
However, the company said that despite lower-than-expected sales in the first half, it was progressing a cost-cutting program on track to deliver around $50 million in savings for FY24.
What they said: UBS analysts said while its increased net leverage ratio was a positive it "indicates potential downside risks to 2H24 expected earnings with lower cost saving guidance".
Domino’s Pizza cuts interim dividend as profit shrinks
The news: Domino’s Pizza cut its interim dividend for the six months to December 2023 after seeing net profit fall nearly 10% year on year.
The numbers: The US restaurant chain recorded a net profit of $58 million for the first half of the financial year — a 9.2% slide compared to the prior corresponding period. While total revenue grew 11% to $1.27 billion year on year, underlying profit before tax for continuing operations was down 19.3% to $89.6 million.
Domino's declared an interim dividend of 55.5 cents per share, a reduction on last year's interim dividend of 67.4 cents per share.
The context: The company said it has been progressing its restructuring and savings program "to better leverage the scale and reach of the business across 12 markets".
The program is expected to deliver around $50 million in network savings for the full financial year, however, the benefit of those savings was offset in the first half by sales that were below expectations.
The source: ASX announcement
