HAMILTON: Domino’s Pizza Enterprises Ltd has plummeted after the loss-making company slashed its dividend. Sales have fallen even faster in the new financial year.
The stock tumbled as much as 21% in Sydney, before trading down 19% at A$15.71 at 11.47am local time.
The decline slashed the company’s market value to A$1.48bil (US$961mil).
Now led by 83-year-old billionaire executive chair Jack Cowin, Domino’s yesterday said it swung to a loss of A$3.7mil in the year ended June 29, from a profit of A$96mil a year earlier.
The company more than halved its final dividend payment to shareholders, and said it’s reducing costs and simplifying operations.
In the first seven weeks of the current financial year, same-store sales declined 0.9%, after falling 0.2% in the more recent reporting year.
The firm has more than 3,500 stores, from Australia to Europe.
“We’re moving heaven and earth on the cost side of the business,” Cowin said on a conference call with analysts after the results were announced. “This isn’t talk.”
The explosion in food-delivery services has made the fast food industry more competitive. Pizza, for years the only option for hot-food home delivery, now competes with a full range of restaurant dishes and fast food outlets.
The company will shift away from higher prices and a reliance on food coupons, to lower prices and fewer tokens in order to make menu prices more transparent. — Bloomberg
