Street view: Long road to cheesy gains for Domino's Australia-based operator

Dominos Pizza Enterprises

21/08/2024 20:23

** Domino's Pizza Enterprises  DMP.AX , the pizza giant's
Australia-based franchise operator, flagged on Wednesday a weak
start to fiscal 2025, with group-wide sales down 1.3%
    ** FY24 underlying profit A$120.4 mln ($81.28 mln) largely
in sync with Visible Alpha (VA) estimate
    ** VA consensus view of 10% growth in 1H25 "seems high" -
Citi
    ** DMP closed 1.4% lower on Wednesday after falling as much
as 7.3% during the trade
    
    
    LONG HAUL TO BAKING IN CHEESY PROFITS
    
    ** Jefferies says it's "pleasing" to see franchisee
profitability improving; turnaround plans and recent store
closures in France and Japan should also benefit sales
    ** Brokerage adds there's "still a lot of work to do but
significant upside if management can right the ship"
    ** Brokerage cuts PT on stock to A$44.00 from A$46.00
    ** Citi echoes Jefferies' comments on franchisee
profitability; says balance sheet strengthening as DMP spending
likely slows and store closures fortify savings/marketing spend
    ** Citi cuts PT on stock to A$38.50 from A$45.35
    ** Morningstar says its long-term outlook on DMP unchanged
on expansion potential
    ** According to VA consensus, DMP's underlying profits seen
trending higher at least over the next four fiscals, surpassing
record profit of FY21 only in FY28


($1 = 1.4813 Australian dollars)

 (Reporting by Sameer Manekar in Bengaluru)
 ((Sameer.Manekar@thomsonreuters.com; Twitter: https://twitter.com/sameer_manekar))