Domino’s FY25: $4.15B Sales Flat, EBIT Down 4.6%, $162M Charges Hit Profit

Flat Sales Mask Regional Contrasts

Domino’s Pizza Enterprises Limited closed the financial year ended 29 June 2025 with group network sales holding steady at $4.15 billion, reflecting a resilient pizza category globally. However, beneath the surface, the company faced a mixed regional performance. Australia and New Zealand (ANZ) and parts of Europe, notably BENELUX and Germany, delivered solid earnings growth, while Asia, particularly Japan, remained a significant drag on profitability.

Underlying earnings before interest and tax (EBIT) declined 4.6% to $198.1 million, with underlying net profit after tax (NPAT) down 2.8% to $116.9 million, excluding a substantial $162.3 million in non-recurring charges. These one-off costs primarily relate to an aggressive store optimisation program, including the closure of 312 underperforming stores, with 233 closures in Japan alone, alongside restructuring and technology investments.

Strategic Reset, Recipe for Growth

In response to these challenges, Domino’s completed a comprehensive strategic review dubbed the “Recipe for Growth.” This plan prioritises cost reduction, operational simplification, and enhanced franchisee profitability. Key initiatives include empowering local market decision-making, reallocating savings to marketing and digital investments, and improving pricing clarity to reduce discounting and strengthen margins.

Japan and France, two markets with distinct challenges, are receiving tailored responses. Japan’s turnaround is underway with a sharper focus on customer engagement, pricing, and promotional strategies, while France has seen leadership changes aimed at stabilising and improving performance. These efforts are expected to take time to bear fruit but are critical to Domino’s long-term growth ambitions.

Financial Discipline and Capital Management

Domino’s reported a net leverage ratio of 2.57x, above its target of below 2.0x, prompting proactive steps to deleverage. The company declared a final dividend of 21.5 cents per share, representing a 35% payout ratio, consciously reduced to support balance sheet strength and reinvestment in growth. The dividend reinvestment plan (DRP) remains active but without underwriting, signalling confidence balanced with caution.

Capital expenditure fell to $54.4 million, down from $62.3 million the prior year, reflecting fewer new store openings and a focus on digital transformation and store refurbishments. Investment in digital platforms continues to enhance customer experience and operational efficiency, with spending expected to moderate as programs near completion.

Leadership Transitions and Market Outlook

Leadership changes marked the year, with the retirement of Group CFO Richard Coney and the appointment of George Saoud as his successor. New executives have also been appointed in key markets, including France and ANZ, underscoring Domino’s commitment to local accountability and operational excellence.

Looking ahead, Domino’s aims to reignite growth through a stronger customer proposition, improved unit economics, and selective network expansion. While the near-term outlook remains cautious, particularly in Asia, the company’s strategic reset and disciplined capital management position it to navigate ongoing market complexities.