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- Domino’s Pizza’s (DMP) shares plummet on the back of its FY23 half-yearly results
- The company’s customer count declined after it raised prices to combat inflation across its 3736 outlets worldwide
- Group CEO and Managing Director Don Meij says Domino’s recognises its response to tackling inflation has not been optimal, as its EBIT toppled 21.3 per cent
- Despite this, he says he’s confident in Domino’s strategy to grow order volumes, total sales and earnings in the second half of the financial year
- Shares in Domino’s Pizza are down 23.36 per cent, trading at $54.69 at 3:08 pm AEDT
Domino’s Pizza (DMP) has seen its shares flop on the back of its FY23 half-yearly results.
The company’s online sales for the six months ending 31 December dwindled 4.5 per cent to $1.53 billion, with repeat customer orders declining after Domino’s raised prices in a bid to combat inflation across its 3736 outlets worldwide.
Over the past three years, Domino’s has added three new markets and 1140 new stores to its portfolio. Across its outlets, it increased product prices and delivery and surcharge fees, which in turn impacted customer ordering rates, particularly in overseas markets.
The company noted the challenges of responding to inflation while also delivering value for customers and margin for franchisees.
“Given the challenging conditions and the effect on our franchisees, we felt it was necessary to lift prices, including applying some surcharges,” Group CEO and Managing Director Don Meij said.
However, he told investors Domino’s recognised the company’s response to combating inflation had not been optimal in the first half of FY23.
“We haven’t always had the balance right for some customer groups, largely in delivery, as we responded to inflation to protect our franchisees’ businesses — we are working hard to correct that for all stakeholders.”
The fast-food chain’s EBIT toppled 21.3 per cent during the half to $113.9 million and net profit fell 28.3 per cent to $63.9 million.
Group revenue dropped 4.3 per cent to $1.15 billion, resulting in the company slicing its dividend to 67.4 cents – down from 88.4 cents this time last year.
Despite this, the CEO said he was confident in Domino’s strategy to grow order volumes, total sales, and earnings.
The pizza franchise reported a 1.2 per cent increase in global sales to $1.97 billion, driven by the addition of 357 new stores.
Domino’s Pizza said it intended to return to “higher same-store sales and earnings” in the second half of the financial year through increased choice and value for customers.
Shares in Domino’s Pizza were down 23.36 per cent and trading at $54.69 at 3:08 pm AEDT.
