Domino's Pizza Enterprises falls on slowing sales momentum, first-half profit miss

Dominos Pizza Enterprises

25/02/2025 01:01

By Roshan Thomas
       Feb 25 (Reuters) - Shares of Australia's Domino's Pizza
Enterprises  DMP.AX  dropped more than 11% on Tuesday, after the
pizza chain operator posted lower first-half profit and a
slowdown in same-store sales momentum in the first seven weeks
of the second half.
    The stock fell 10.7% to A$28.8, as of 0025 GMT, its lowest
level since January 16, and was among the biggest losers in the
broader benchmark ASX200 index  .AXJO .
    The pizza chain's biggest franchise operator outside of the
U.S. reported same-store sales growth of 1.5% for the first
seven weeks of second half of 2025. It was slower than the 4.3%
growth reported for the first five weeks, when Lunar New Year
holidays boosted sales.
    The rate of the seven weeks is indicative of underlying
performance and is running below Visible Alpha consensus
estimate of 2.6% growth for second half of 2025, analysts at
Jefferies said.
    The company reported underlying profit after tax from
continuing operations of A$58.8 million ($37.29 million) for the
six months ended December 29, 2024, missing Visible Alpha's
consensus estimate of A$59.3 million. 
    Domino's Pizza Enterprises runs the largest master franchise
of the U.S. pizza giant Domino's Pizza  DPZ.O  in 12 countries
across Asia, Europe, Australia, and New Zealand. Japan accounts
for just over a quarter of those stores.
    Revenue declined across its key markets, with Asia down 7.1%
to A$402 million in the first half. 
    "Throughout the 2024 calendar year, the group's Asian
operations had been affected by a series of external factors,
including geopolitical tensions lowering sales in Malaysia, and
a brand issue relating to ingredient supply to Taiwan," the
company said. 
    Domino's, however, declared an interim dividend of 55.5
Australian cents per share, same as last year.

($1 = 1.5770 Australian dollars)

 (Reporting by Roshan Thomas in Bengaluru; Editing by Rashmi
Aich)
 ((Roshan.Thomas@thomsonreuters.com;))