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Domino’s Pizza (ASX:DMP) has announced it will close stores in Japan and France, locking in the company’s status as biggest faller heading into lunchtime trades.
The company has finalised a strategic review kicked off in June last year that concluded the shutdowns were in best interests. The company abandoned Denmark at the same time, making France the second European jurisdiction Domino’s has failed to flower in.
Perhaps less expected is the exit from Japan, though given the rich culinary histories of France and Japan, it perhaps isn’t too surprising at the pub test level why the company’s expansions haven’t always worked.
If Domino’s is planning to exit Japan and France entirely – collectively representing a withdrawal from at least two developed markets across Asia and Europe – that wasn’t made clear on Thursday.
The company intends to close up to 80 stores across Japan (franchisees willing,) and it will shut down 20-30 stores in France. The latter will be offset by another 10 stores opening, suggesting that it might not be faring as badly as it was in Denmark when it comes to European market share.
Global store growth, however, is expected to be flattish in FY25 with some small upside possible, before hitting 3-4% in FY26 – a calculation almost definitely assuming interest rate cuts progress at a pace supportive of economic bounceback broadly.
If the company’s European experience has hit management’s morale, it’s a lesson they’re learning from. The company’s long-term growth forecasts assume “upside possible in large markets such as Germany.”
DMP last traded at $32.97/sh.
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