Domino’s first-half profits down 19 per cent; Meij plans to cut $50 million in costs
Domino’s Pizza has reported a fall in first-half profit of 19 per cent after customers in Europe and Asia remained cautious amid inflationary pressures.
Domino's Don Meij has revealed a shakeup of the business (pic: Domino's)
The Australian pizza company said more work was needed to get the balance right in some international markets, with net profit after tax for the six months ended 31 December 2023 slipping to $57.7 million.
France and the Netherlands have proven difficult markets of late. Customers in France have made fewer visits to stores, while there has been a rise in labour costs in the Netherlands.
Dominos said trading conditions had been difficult in Asia, although sales promotions have helped make a better start to the second-half of the financial year.
The company has been cutting costs and this has affected short term earnings.
Dominos paid $7.6 million in employee termination costs during the first-half. There was $2.3 million in write-downs and net proceeds of disposal of assets.
The business is slashing $50 million in costs this financial year.
However chief executive Don Meij claimed the first-half sales growth of the Australian and New Zealand operations was the strongest in six years.
He said these sales initiatives were gaining traction in international markets.
“They also show more is required to get the same results across all 12 of our markets,” he said.
Shareholders will receive an unfranked interim dividend of 55.5 cents per share. This is lower than the partially franked 67.4 cents cents per share from this time last year.
