Domino’s Pizza Enterprises will close down more than 200 stores, including some based in Australia.
The pizza giant told the Australian share market it would shut 205 unprofitable stores, including 172 in Japan and other locations in France and Australia.
Domino’s chief executive Mark van Dyck said the closures were part of a strategy review to simplify its operations and close the many stores that had opened during the Covid pandemic.
‘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 said.
‘Where change is required, we are acting quickly and transparently.’
RBC Capital Markets analyst Michael Toner called the store closures a ‘logical’ decision based on Japan’s trading outlook.
‘We believe investors should view positively the company’s view towards restoring network health in Japan through store closures and focus on profitable growth,’ he told the ABC.
Domino’s shares were 21.6 per cent firmer at $36 by 1pm AEDT, following the trading update for the first half of 2024-25.
Domino’s Pizza Enterprises will close down more than 205 stores, including some based in Australia
‘Our priority remains clear—creating value for customers, franchise partners, and shareholders,’ Mr van Dyck said.
Of the 172 stores slated for closure in Japan, 114 are run by head office while 58 are franchised.
Dominos’ told investors it had opened too many stores during Covid when lockdowns had boosted demand for takeaway food and home deliveries.
‘Many of these stores were opened during the Covid-19 sales surge but have since struggled with declining post-pandemic demand and higher input costs,’ it said.
But Mr van Dyck said Domino’s was still committed to Japan.
‘Japan is an attractive market for quick service restaurants and pizza, with significant long-term upside for Domino’s,’ he said.
‘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.’
Domino’s told investors it expected a net profit before tax of $84million to $86million for the six months to the end of December 2024.
Domino’s chief executive Mark van Dyck said the closures were part of a strategy review to simplify its operations and close the many stores that had opened during the Covid pandemic
The store closures were part of a ‘cost efficiencies’ drive to save $14.9million in 2024-25.
Germany had recovered from weakness earlier in 2024-25 but France went backwards.
Better results were delivered in Asia with Singapore and Taiwan having double-digit growth.
Shareholders are getting an interim dividend of 55.5 cents a share for the first half of the financial year.
