Domino’s has booked record earnings in Australia with slow start to sales in new FY

A growing market of daytime customers and singles snacking on pizza wasn’t enough to halt a slowdown in sales into the new financial year as Domino’s results disappointed analysts.

Domino's CEO Don Meij with pizzas at Domino's store. Picture: Annette Dew

Domino’s boss Don Meij says diners are increasingly eating pizzas for lunch and daytime snacking to drive record earnings for his Australian arm, however analysts have pointed to a slow start to fiscal 2025 as signs of operational ills still bedevilling the pizza chain operator.

The ASX-listed Domino’s Pizza Enterprises, which from its Brisbane headquarters runs the pizza brand in Australia, New Zealand, Japan, Germany, France and the Benelux countries, on Wednesday delivered full-year results in-line with market expectations as it showed recovery in Japan, strong sales growth in Australia and some headwinds across smaller Asian markets like Malaysia.

Domino’s on Wednesday posted full-year sales of $2.377bn, up 2.7 per cent, as net profit rose 136.5 per cent to $96m. The company declared a final dividend of 50.4c per share, up from 42.6c, payable on September 25.

The full-year net profit was bolstered successfully delivering on a $50m savings program, allowing for reinvestment into the profitability of stores and franchise partners, at the same time as delivering earnings growth at expanded margins.

Online sales rose 7.5 per cent to $3.37bn with online food delivery companies helping to reach lone diners in particular who were enjoying pizza delivered to their homes.

But in a trading update accompanying the latest financial results the once high-growth Domino’s that had a reputation for double-digit growth and an aggressive global store rollout strategy revealed that the first half of 2025 had started disappointingly.

Domino’s said same store sales since July had fallen 1.3 per cent to be slightly below expectations, and that while its flagship Australian and New Zealand regions were growing its European sales were dragged lower by poor sales out of Germany and France was continuing to struggle. In Asia Japan sales were negative as well, with Malaysia also facing shrinking sales and expected to remain negative until the second quarter.

Despite Domino’s achieving savings of $50m, improving the profitability of Australian pizza stores and also capturing market share as diners switched to pizza from hamburgers and fried chicken, the disappointing start to 2025 weighed on the share price to send it down almost 6 per cent in early trade. It pared losses to be down 1.7 per cent by midafternoon, at $32.84.

Mr Meij put a more positive spin on the full-year performance, arguing although the start to 2025 was below expectations there were strong signs of recovery across many of its regions after previous operational missteps around menus, pricing and dealing with inflationary pressures.

“You’ve got parts of the business, those parts that have already fired up, like Australia, New Zealand which wrote a record profit, had the strongest same store sales in seven years, franchise profitability growing. Similar in Germany, similar in Singapore, similar in the Benelux,” he told The Australian.

“And the two businesses we talk about where we’ve got an action plan, where we are applying and learning from the other businesses, which is Japan and France.”

Mr Meij said Domino’s “biggest engine” was its Australian and New Zealand stores which had a record year for profits and one of its best same store sales growth in recent years.

Revenue in Australia and New Zealand over 2024 rose 4.2 per cent to $795.3m, European sales lifted 1.6 per cent to $762.7m and Asia sales was up slightly by 0.4 per cent to $818.7m.

Earnings for Australia and New Zealand was up 10.4 per cent, European earnings up 33.8 per cent and Asian earnings down 28.7 per cent.

Mr Meij said a standout of the Australian and New Zealand arm was storing growth outside of the traditional dinner rush.

“The biggest thing that you see from Australia and New Zealand is the segmentation growth. So our volume isn’t just coming through in a dinner rush, we’ve had really strong lunch growth, snacking growth and late night.”

A new menu range aimed at single people had also proved very popular.

“This was our first time into this foray of single eaters, and they’ve rewarded us. So we’ve been the fastest growth quick service restaurant in lunch. We were the fastest growth pizza company in Australia,” he said.