Domino’s hit burns shares
A MISSED full-year profit and sales guidance prompted investors to dump Domino’s shares yesterday, wiping a massive $292 million off its market value.
Despite posting a group net profit after tax (NPAT) of $136.2 million, a 15 per cent lift on the previous year, shares fell as much as 12 per cent in early trade.
The stock recovered some ground and closed 6.52 per cent down at $49. Domino’s had forecast NPAT in the region of 20 per cent. Same-store sales in its major Australia and New Zealand market and Europe also fell short, while Japan delivered small samestore growth.
Total sales grew 11.7 per cent to $2.59 billion.
Managing director Don Meij noted abnormally hot weather in Europe and a tough Christmas period in Japan were factors.
“We delivered positive growth in all markets but after consecutive years of significant and compounding growth, our bar for success is even higher,” he said.
IG market analyst Kyle Rodda said the share decline was largely linked to the lowerthan-expected profit.
“The actual numbers missed even the lowest analyst estimate, coming as quite a shock to the market,” he said.
The company did have some big bright spots, notching up a record of 2 million pizzas and sides in a single week in Australia, and online sales performing strongly, growing 19.4 per cent to 63.9 per cent of total group sales.
The company plans to open 400 new stores in Australia and New Zealand in seven years — expanding by a third.
Mr Meij also said the company had huge potential in Europe and Japan. “It will be a fast-growth, high-growth business,” he said.
It will pay a partly franked 49.7¢ a share final dividend.