Australia's Domino's sees flat store growth on closures in Japan, France (updated)

Dominos Pizza Enterprises

17/07/2024 08:53

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       BENGALURU, July 17 (Reuters) - Australia's Domino's
Pizza Enterprises  DMP.AX  said on Wednesday it expects store
growth to be flat to slightly positive in its current fiscal
year, and decided to close up to 80 low-volume stores in Japan
and 10-20 stores in France.
    Domino's Japan had opened over 400 stores between financial
years 2020-2023, which resulted in a number of "immature
stores". Moreover, higher media costs and lower advertising
funds led the company to undertake a review of its store
locations.    
    "The aggregate contribution of these low-volume stores is
loss-making and the closures will have a positive impact on
earnings, which will be reinvested into additional marketing and
advertising to reach more customers and lift order counts in
this low-frequency market," the company said in a statement.
    The pizza-maker expects a return to positive same store
sales in Japan in financial year 2025 that started this month,
and sees overall group store growth of 3%-4% in fiscal 2026.
    The company added that the long-term outlook for its markets
"remains appropriate", particularly due to possible additional
upside in large markets such as Germany.
    The retail food outlet operator is due to report its annual
results in August. It had withdrawn its fiscal 2024 outlook in
January, after its first-half profit forecast missed
expectations, hurt by weaker-than-expected network sales in Asia
and Europe.
    
    

 (Reporting by Himanshi Akhand in Bengaluru; Editing by Rashmi
Aich)
 ((Himanshi.Akhand@thomsonreuters.com;))