Fast food king Jack Cowin loses $600m as Domino’s shares tank

Fast food king Jack Cowin’s stake in Domino’s Pizza slumped by more than $600m in six hours amid concerns the company’s stellar sales growth trajectory is slowing.

Fast food king Jack Cowin’s stake in Domino’s Pizza slumped by more than $600m on Thursday amid concerns the company’s stellar sales growth trajectory is slowing.

Shares in Brisbane-based Domino’s slumped $26.18, or 18.4 per cent, to $116.12 after the company, which has seen surging profits during Covid-19, warned in a trading update that sales growth was facing headwinds.

Mr Cowin, who serves as chairman of Domino’s, saw his 23 million shares in the company slump $603m to $2.6bn over the six hours the ASX was trading on Thursday. Domino’s chief executive Don Meij also took a hit with his 1.8m shares slumping by $47m in value to $209m.

Despite Thursday’s share rout, the stock is up 179 per cent since March last year when it fell as low as $41.66.

Domino’s said total sales since the start of the new financial year in July had risen 8 per cent with same store sales growth of 4.43 per cent. This was against sales growth of 14.6 per cent in 2021 and same store sales growth last year of 9.3 per cent.

Domino’s conceded that sales growth since the start of fiscal 2022 had been uneven across regions, with operations affected by local conditions including lockdowns and ongoing changes in customer behaviour, making short term forecasts challenging.

Jack Cowin. Photo by Richard Gosling

Citi analyst Sam Teeger said cost pressures appear to be building due to the two-week closure of the highly profitable New Zealand market, and food cost inflation coming earlier than expected. Citi estimates same store sales growth for Domino’s will fall by 1 per cent in the last nine weeks of the first half of 2022.

Mr Cowin, who moved to Perth from Canada in 1969 to establish a KFC franchise after borrowing $10,000, said last year that the COVID-19 pandemic had accelerated the shift by customers to ordering their burgers and fries online and being more comfortable with home delivery. Mr Cowin’s privately held Competitive Foods Australia has around 400 Hungry Jack’s franchises around the country

At its annual general meeting on Wednesday, Mr Cowin, 79, and one of Australia’s richest men, assured shareholders he had no plans to sell any of his Domino’s shares at this stage.

He was also asked whether it was his intention to continue to serve the company as long as News Corp chairman Rupert Murdoch.

“That’s wishful thinking,” he replied, going on to say if he was capable of doing what Mr Murdoch does at 90 he would certainly like to.

“I may not be that lucky but that would be my desire … My view on this subject is that you do it as long as you enjoy it.”