“Maintaining the balance between these two factors will be key to longer-term growth for Domino’s,” said Mr Teeger, who has a “buy” on the stock,ĭomino’s has had challenges with store rollout recently due to a shortage of staff and materials, and some European franchisees are taking longer to commit to new stores, but Domino’s reiterated it longer-term store forecast for 9 per cent to 12 per cent growth per year over the next three to five years. Eamon GallagherĪt this year’s Asia event, top-performing stores in both Japan and Taiwan were noted to be seeing materially lower cost of delivery than stores in other markets.ĭomino’s expects that delivery costs can be reduced by up to one third in every market, but Citi analyst Sam Teeger warned of sales dilution from these fortressed regions making the incremental additional profit from low delivery costs immaterial. Domino’s aims to reduce delivery time with its “fortressing” strategy, adding more stores in existing sales areas to cut delivery times, get closer to pick-up customers and boost sales.įiretrail Investments portfolio manager Blake Henricks said rising inflation is a double-edged sword for Domino’s. He added while the Japanese consumer sentiment is improving costs are also rising.Ĭost of delivery remains the focus in all regions of its operations. ![]() In our view, this premium multiple vs peers is warranted given the company’s superior growth trajectory in developed markets,” he said. “We value Domino’s Pizza ANZ at 25x, Domino’s Asia at 28x, Domino’s Europe at 29x with a Domino’s group EV/ EBIT multiple of 27.2x. Mr Cousins – who has a ‘Buy’ call and a $90 per share 12-month price target, cut from $110 – said the market is underestimating the long-term growth potential. UBS consumer analysts led by Shaun Cousins believes the market has overreacted to weaker performance in Japan, where Domino’s has added menu items focused on premium products (such as wagyu beef and pizza rice bowl) and better marketing products to highlight quality of ingredients to drive sales. Despite the crumble, Domino’s is still up more than 13 per cent over the past five years. The company’s stock rocketed higher during COVID-19 to a peak of $167.15 in September 2021, before crashing back to $62.40 on Monday. The online food delivery market is estimated to reach $35 billion by 2026 across Asia and Europe, from just $8.6 billion in 2017. ![]() The move to online has grown the entire market for all quick service restaurants.ĭomino’s pizza boss Don Meij recently held an Asia investor day when he named two new country heads for Japan and Taiwan. The pizza company’s digital and offline sales have jumped from $557 million in fiscal 2014 to $2.93 billion in fiscal 2021. ![]() It has been a growth story accelerated by digital transformation. Like all companies, Domino’s is facing headwinds, including rising inflation, conflict in Europe, and currency movements that hurt translated earnings back into Australian dollars.ĭomino’s listed in May 2005 on the ASX at $2.20 per share. The $5.4 billion Brisbane-based company – which is the master franchise holder for the Domino’s brand in countries including Australia, New Zealand, Japan and Taiwan, and run by self-styled pizza-tech entrepreneur Don Meij – talked up how the Japanese and Taiwanese markets are changing and the perception of pizza is gradually moving from just special occasions to any night of the week. Takeaway pizza giant Domino’s Pizza Enterprises held its two-day Asia investor conference this past week in Japan, starting in Tokyo.
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