Join our daily newsletter At The Bell to receive exclusive market insights
- Domino’s reported a 4.6 per cent drop in profits over the 2019 financial year
- The pizza franchise is financially operating best abroad, while sales in Australia and New Zealand fell soft
- 22 franchisees in Australian and New Zealand were sacked due to underperformance and, in some cases, underpayment of staff
- Domino’s share price is down 1.89 per cent at $43.57 apiece, fighting back from a 5.5 per cent drop this morning
Dominos has seen its share price slump today after revealing to shareholders yearly profits are down.
The pizza franchise saw a 4.6 per cent drop in profits between the 2018 and 2019 financial year, going from $121.5 million to $115.9 million.
Statutory earnings before interest and tax also took a 6.2 per cent hit year-on-year, down from $184.8 million to $173.4 million. However, underlying figures recorded a 7.2 per cent increase after reporting a non-recurring $47.4 million cost.
Revenue, however, saw a boost of 19.6 per cent this financial year, jumping from $1.154 billion to $1.435.4 billion.
The company has seen a big swing in online sales, up 18.2 per cent to reach $1.9 billion. These sales account for over two thirds of all sales. Over 66 million Dominos orders were placed online during the fiscal year.
Global food sales came in at $2.9 billion, following an 11.9 per cent increase of $308.4 million.
Operations in Japan, in some areas, have financially exceeded those in Australia and New Zealand, making up 54.7 per cent of the company’s underlying earnings before interest, tax, depreciation and amortisation.
Domino’s now has 2531 stores across eight countries in three continents. CEO and Managing Director of Dominos Don Meij said global expansion has been a key focus for the company.
“Our international operations today account for more than half of our earnings, and they will be the largest driver of our future growth,” Don said.
“We made a strategic, long-term decision 13 years ago to expand internationally through our first acquisition in Europe and we remain active in examining additional Domino’s markets where they would add value to our business,” he said.
Over the financial year, Domino’s met its 1000 store milestone in Europe, with more to open in the coming weeks.
In Australia, Dominos sacked 22 franchisees due to underperformance and, in some cases, due to underpayment of workers.
CEO of the Australian and New Zealand Dominos branch, Nick Knight, said: “We have identified some of those franchisees who have demonstrated they no longer had the passion or capability to execute successfully as we grow.”
“We are confident in the progress of our strategic initiatives, including our investment in technology and new marketing campaigns. Our world-first DOM Pizza Checker is already helping to deliver meaningful improvements to the quality of our pizzas, which customers recognise,” Nick continued.
Dominos is climbing back after a sharp drop of over 5.5 per cent this morning, now currently sitting 1.89 per cent in the red. Its share price is $43.57 apiece at AEST 11:50am.
