Domino’s Pizza has reported a weak trading update, with same-store sales for the first seven weeks of the 2025 financial year falling short of expectations. The company is struggling to revitalize its underperforming markets in France and Japan.
For July and most of August, same-store sales were down 1.3 percent. Domino’s CEO Don Meij emphasized that improving performance in France and Japan is crucial for the company’s success. “If these markets lag behind, it will be painful,” Meij said. “This year, we need to see growth in these regions. I am confident in our plans.”
Domino’s shares fell 6.3 percent to $31.31 on Wednesday. The stock had been trading above $160 in late 2021, driven by strong sales during the pandemic.
In contrast to the overseas struggles, Domino’s operations in Australia and New Zealand performed well. Underlying earnings before interest and tax rose 10.4 percent to $124.1 million for the 12 months ending June 30. The company increased its final dividend to 50.4¢ per share from 42.6¢ the previous year. Net profit surged 136.5 percent to $96 million, but on an underlying basis, it fell 1.9 percent to $120.4 million.
Barrenjoey analyst Tom Kierath described the first seven weeks of trading as “soft” and below the expected growth of 3.3 percent. MST Marquee analyst Craig Woolford noted that weak sales in Japan and France might delay any recovery in those markets.
Meij did not disclose alternative plans if the turnaround in France and Japan fails. “We’re going to continue working on it,” he said. In July, Domino’s announced it would close nearly 10 percent of its stores in these countries and conduct a strategic review.
In Australia, where the business is now led by Kerri Hayman, Meij’s sister, Domino’s has successfully attracted “single eaters” and lunch customers. Hayman, who returned to Australia a year ago, has focused on competing with rivals like McDonald’s and Hungry Jack’s. “The fastest growth is in the single eater market,” Meij said.
Domino’s chairman Jack Cowin, founder of Hungry Jack’s, holds a 26 percent stake in the company. Meij speculated that the expansion of Mexican fast-food chain Guzman y Gomez would not significantly impact Domino’s. “GyG is an emerging player,” Meij said. Research shows that 80 percent of Domino’s customers also eat at McDonald’s, reducing the threat from GyG.
Meij praised Hayman’s performance and the board’s focus on governance and transparency in her appointment. “I’m very happy to have a star performer in Australia,” Meij said. Hayman, who has worked with Domino’s for 36 years, previously served as operations director for the UK-listed Domino’s and sold her 14 stores in the US last year.