Domino's Pizza Enterprises Ltd stock took a beating on Monday, dropping more than 11% from A$32.22 per share to A$29.58 yesterday before continuing the slide to A$28.15 today for a 14.15% slump over the last five days.
The share price tumble followed a A$22.2 million net loss over the six months to December 29 for Domino’s, generated mostly from store closures as the ASX-listed company shuttered 205 stores across Australia, Asia and Europe.
Most of those closures occurred in Japan, affecting 172 of the 1,000 franchises currently operating in the country.
Australia shows signs of growth
While the pizza franchise’s earnings performance suffered in Asia (-19% or A$17 million) and Europe (-11.1% or A$32.3 million), Australian stores showed signs of growth, with earnings picking up by 7.6% or A$67.7 million.
The company says it is undertaking a comprehensive restructuring of its business to create a simpler, more consistent experience for consumers.
“The steps we are taking today will allow us to develop and deliver a roadmap to build out the long-term opportunity for Domino’s, in large, established markets with room to grow,” CEO and managing director Mark van Dyck said.
“But to reach our long-term potential we must deliver a simpler, more consistent Domino’s.
“A simplified customer proposition, a simplified cost base and simplified franchise operations to drive our share of the pizza category; delivering for customers, franchise partners and shareholders.
“These are our immediate priorities.”
The company has declared an unfranked interim dividend of 55.5 cents per share, unchanged from last year.