Domino's Pizza punished by shareholders

Domino's Pizza posted a net profit after tax of $136.2 million for the last financial year, but it was not enough to appease shareholders who dumped the stock.

The pizza giant’s shares plunged as much as 12 per cent after it revealed it had fallen short of its profit guidance by around 5 percentage points and missed its sales targets.

Same-store sales in Australia and New Zealand fell short of its guidance of between 6 and 8 per cent, growing at 4.5 per cent compared to 13.6 per cent a year earlier.

Sales at its European stores grew 5.7 per cent, up from 2.8 per cent but also short of guidance (6 to 8 per cent). Japan grew 0.9 per cent, compared to negative 0.6 per cent last year.

Total revenue grew 7.5 per cent to $1.15 billion, half a billion dollars short of the market's expectations.

It is the second year Domino’s has disappointed its shareholders, after missing guidance in the previous financial year.

Domino's chief executive Don Meij, who as Australia’s highest paid CEO pocketed nearly $37 million last year, remained upbeat though.

“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.

“The results of this year reinforce our confidence in our business; strong store metrics with increasing profitability mean internal franchisees are opening new stores and building their businesses."

Sheridan Randall - 15 August 2018