Shares in Domino’s Pizza shares dived more than 19% at one stage on Thursday morning after investors gave a very big thumbs down to the comments at the company’s annual meeting on Wednesday.
The shares dropped as much as 19.3% to a low of $114.80 when trading resumed for the session after Domino’s declined to provide any guidance. They steadied a little but were still down a nasty 18.4% at $116.12 at the close on Thursday.
The company blamed what it called uneven growth and changes in customer behaviour.
In Wednesday’s update, Domino’s said same store sales were up 4.3% for the financial year-to-date.
“Domino’s has recorded strong growth in FY22 during difficult and uncertain times,” it says.
“However, sales growth has been uneven across regions, with operations affected by local conditions including lockdowns and ongoing changes in customer behaviour, making short term forecasts challenging,” CEO Don Meiji said in his presentation.
“As they have been since the start of this pandemic, our operations are affected by local conditions including lockdowns and changes in customer behaviour.
“This has included the recent closure of our New Zealand operations, and some of the most restrictive community lockdowns we have experienced, implemented in Victoria and New South Wales, as our communities have been kept safe while we transition to this next phase of COVID-19,” he said.
“Rebuilding our carry-out sales is still ongoing. In Japan, sales to September were excellent, but as the State of Emergency has been lifted, and restaurants, bars and shopping centres have reopened, network sales have been negative on a one-year basis.
“There’s no question the next 6-12 months will be challenging. That should not be surprising – the past 18 months have been just as challenging.
“Importantly, across all markets, we have a materially larger business than the corresponding period pre-COVID-19. This includes our store footprint, and we intend to set a new record for DPE network expansion this year.”
Mr Meiji attempted to explain the lack of any guidance, saying; “Our long-term focus is why we provide an outlook, rather than short-term guidance.”
“As I look beyond the next few months, we are confident in our outlook of growing Same Store Sales 3-6% over the next 3-5 years, and adding 9-12% of our network through organic growth. We also remain active in pursuing additional markets,” he added.
But those pesky investors wanted more detail for the next few months, hence the sell down.
