Domino’s Pizza says sayonara to 176 struggling | Australian Markets

Domino’s Pizza has launched a strategic review of its business because it prepares to shutter 205 shops which are working at a loss.

The struggling Japanese market will take the brunt of the blow, with 176 shops — together with 114 corporate-owned operations — to close up store at a price of $97 million.

In a trading replace launched on Friday, Domino’s mentioned Japan and France can be a specific focus for the strategic review that can embrace delivering a worth creation plan and market review to improve efficiency.

Newly put in chief government Mark van Dyck mentioned Domino’s was positioning for long-term sustainable growth.

“When I started in this role three months ago I said we would move decisively to reshape our business for long-term success,” Mr van Dyck mentioned.

”The place change is required, we’re appearing rapidly and transparently. Our precedence stays clear — creating worth for purchasers, franchise companions, and shareholders.”

Many of the shops focused for closure have been opened during COVID-19 which fuelled a surge in gross sales. However Domino’s conceded they’ve since struggled amid the post-pandemic decline in demand and better prices as inflation soared.

Mr van Dyck mentioned Japan remained a high-potential market for Domino’s and the closure of the shops would additionally it to give attention to high-density population areas that would ship incremental, profitable growth. Extra particulars on the reset in Japan will come on the company’s second-half investor day.

Domino’s reported a preliminary same-store gross sales decline of 0.6 per cent for the primary half of the financial 12 months, regardless of 4.2 per cent growth in Asia sale over the six-month period.

It famous group-wide same-store gross sales have been up 4.3 per cent since January as Asia advantages from “sales tailwinds” because of the timing of seasonal celebrations.

Underlying web revenue earlier than tax is anticipated to be within steering of between $84m and $86m.

Internet debt elevated over the primary half by $15m to $705.1m, with an underlying discount of $31.4m, offset by $46.4m in international transaction translations.

Domino’s mentioned it plans to subject an interim dividend of 55.5¢ a share.

The company mentioned its Australian and New Zealand community continued to ship optimistic outcomes, with new product launches reaching prospects on new events, together with the launch of Domino’s Giant Doughnuts, which added extra gross sales and prospects.