Shares of the Australia-based Domino’s Pizza Enterprises Limited (AU:DMP) fell over 1% at the time of writing after the company reported dismal results for FY24 and a weak start to FY25. In FY24, the company witnessed a 1.9% year-over-year decline in its underlying NPAT (net profit after tax) to AU$120.4 million. Despite positive same-store sales, the pizza chain continued to face challenges due to cautious consumer spending and rising operational costs.
Domino’s Pizza Enterprises is Australia’s largest pizza chain in terms of store count and sales. Additionally, it is the U.S.-based Domino’s brand’s largest franchisee worldwide.
Domino’s Sees Positive Same-Store Sales Momentum
In FY24, Domino’s global sales grew by 4.6% to $4.19 billion. This growth was mainly driven by same-store sales growth of 1.5% and new store openings. Meanwhile, the company’s online sales rose 7.5% to $3.37 billion in FY 2024 and accounted for roughly 80.4% of total sales.
Among the company’s regions, Australia and New Zealand achieved the highest same-store sales growth of 7.9% in seven years. Meanwhile, in Europe, Germany performed well and expanded its customer base and market share with innovative offerings.
On the flip side, Japan remained the weak link with fading post-COVID momentum. Earlier in May, the company announced the closure of up to 80 low-volume, unprofitable stores in Japan. The company expects to return to growth in Japan with positive same-store sales and improved core margins in FY25.
Domino’s Faces a Weak Start to FY25
Domino’s has started FY25 on a weak note, with same-store sales down 1.3% and slightly missing expectations. Nonetheless, the company believes its short-term sales underperformance will not affect the broader strategy of driving improvements at the store level for franchise partners.
Analysts at Jefferies stated that FY25 numbers so far are depressing and the market will be seeking signs that the sales trend can improve.
Overall, Domino’s has upheld its FY 2025 guidance, projecting same-store sales growth of 3% to 6%.
Is Domino’s Pizza Stock a Buy?
According to TipRanks, DMP stock has received a Moderate Buy consensus rating based on 12 recommendations, including six Buys, five Holds, and one Sell. The Domino’s Pizza Enterprises share price target is AU$40.83, which is 23.3% above the current price level.
