Domino’s Pizza Enterprises has reported a loss of $22.2 million for the six months ending December 29, marking its first loss in 20 years since listing on the Australian Securities Exchange (ASX). This downturn is primarily attributed to $115.6 million in writedowns, impairments, and restructuring costs. A significant portion of these expenses stems from the closure of 205 unprofitable stores, including 172 in Japan, as part of a strategic plan to streamline operations and enhance profitability.
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The company’s rapid expansion during the COVID-19 pandemic, especially in Japan, led to market saturation and challenges in maintaining quality. Newly appointed CEO Mark van Dyck acknowledged this overexpansion and emphasized a more disciplined approach moving forward. He stated, “Some of our COVID-period expansion resulted in stores that simply weren’t optimal based on our current customer proposition, and removing them will strengthen our network.”
Despite the global challenges, Domino’s Australian sector showed resilience with improved earnings. However, overall same-store sales growth declined by 0.6%, and total sales fell by 6.4% to $1.17 billion. The company remains optimistic, with van Dyck highlighting the potential for growth in the global pizza market and plans to reinvest in sustainable, long-term development.
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In response to the restructuring, Domino’s shares experienced volatility. Following the announcement of store closures, shares initially surged by up to 23.8%, reflecting investor confidence in the company’s strategic direction.
Looking ahead, Domino’s is committed to refining its market strategies, improving its value proposition, and ensuring disciplined expansion to restore profitability and shareholder value.
