DMP -5.86%: the pizza franchisor fell to a 3-year low today after announcing it was looking to close several underperforming stores combined with a poor trading update. They’ll start by wrapping up the 27 stores in Denmark, a small group they bought out of receivership in 2019 which has failed to improve materially since acquisition. The company also plans to close a further ~70 corporate stores and bring on franchise partners for another ~70 corporate stores. These changes plus a handful of other streamlining operations are expected to add $53-59m in EBIT annually while costing $80-93m over FY23 & 24. Sales have been lacklustre this year, running at +0.2% in the second half, well below the 3-6% target, while costs have also been squeezing margins. We see no reason to catch the falling knife into new lows.
MM is neutral to bearish DMP
Add To Hit List
