Domino's Pizza shares climb on improving outlook
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More news: Shares in Domino's Pizza Enterprises climbed more than 5% to $50.48 in early trading on the ASX, with investors cheering an improving outlook after a horror FY23 that saw profit slide 74%. The company said sales in Europe and ANZ had risen 6.6% each since July 1, although Asian stores were down 7.8%, and CEO Don Meij promised customers there wouldn't be any more price increases this year.
Domino’s Pizza slashes dividend as profit tumbles
The news: Domino’s Pizza Enterprises' full-year profit has dived, prompting the restaurant chain to slash its dividend.
The numbers: Net profit for the year to 30 June dropped 74.4% to $40.6 million, even as revenue slipped 3.5% to $2.4 billion. The company will pay a final dividend of 42.6 cents a share, compared to 68.1 cents a share a year ago. For the current year, sales in Europe and ANZ are up 6.6% each since July 1, but down 7.8% in Asian stores.
The context: Domino’s, which owns and operates pizza stores in Australia, Asia and Europe, has suffered a slide in profit after customers revolted against price hikes earlier in FY23. Chief executive Don Meij said the company won’t pass on costs to customers via higher prices on menu items this year and earnings improvement in fiscal 2024 will rely on rebuilding customer frequency and order volumes.
What they said: “Some of the changes we made including the introduction of a delivery service fee did not resonate with some customers and over time they ordered less frequently.”
“We have heard this feedback loud and clear and have now removed the majority of these fees. That said, some pricing decisions were accepted by customers, such as slightly increasing the price of our value range, while still providing amazing value,” CEO Don Meij said.
The source: ASX announcement
