Domino’s begins strategic review

Domino’s Pizza has announced it will close 205 “loss making” stores – 172 of them in Japan – in a bid to improve the company’s profitability.

Of the 172 store closures in Japan, 58 are franchise-based, with the remainder corporate-owned.

Friday’s market update resulted in the company’s shares closing up 21 per cent to $35.93, a three-month high.

Domino’s said the majority of these stores were opened during the height of the COVID-19 pandemic, however haven’t been able to replicate solid sales in a post-pandemic marketplace. 

The pizza giant expects to save $15.5 million annually from the closures and accelerated re-franchising. 

The news comes as Mark van Dyck-led Domino’s begins a comprehensive strategy into its operation, with particular emphasis on its stores in France and Japan. 

"When I started in this role three months ago I said we would move decisively to reshape our business for long-term success," Mr van Dyck said.

"Where change is  required, we are acting quickly and transparently. Our priority remains clear— creating value for customers, franchise partners, and shareholders."

Domino's said its underlying profit before tax would likely remain within its guidance target of $84-86 million.