DMP +21.3%: Rallied on a trading update today, new CEO Mark van Dyck 3 months into the role kicking his stint off with a bang. The CEO announced sweeping changes, the closure of 205 unprofitable stores, 172 of which are based in Japan.
Japanese Dominos charge upwards of A$30 for a single pizza delivered, not exactly the value proposition we have here in Australia, so it comes as no surprise the majority of these stores aren’t making money.
As part of the move, DMP will incur a one-off FY25 cost of $97m but the move will save ~$15m annually. The decision signals a broader strategic change within the business from top line revenue expansion via store growth to a leaner operation focusing on profitability.
We are 5 weeks into the 2nd half of the year and Same-Store-Sales are up 4.3%, before these changes, which is a promising sign for earnings trajectory. If the business can continue the run rate of sales into FY26 while cutting the fat, we may well have seen the bottom for Dominos.
MM is now neutral to bullish DMP
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