Domino's Pizza: FY23 earnings - Green shoots emerging

About the author:

Alexander Mees
Author name:
By Alexander Mees
Job title:
Co-Head of Research and Senior Analyst
Date posted:
24 August 2023, 6:30 AM
Sectors Covered:
Gaming and Retail

  • We get the sense the worst has passed for Domino's Pizza (ASX:DMP). Order counts are starting to move up following the removal of delivery service fee and reset of the menu to appeal to the value-focused customer. Having brushed uncomfortably close to its banking covenant, DMP has stated that debt is now on the way down and it is ‘confident’ there will be no breach (and no capital raise) in FY24.
  • There are green shoots of recovery. Growth swung positive in ANZ and Europe in early FY24, driven by better volumes. It will take longer in Asia, but we think DMP will achieve its 3-6% same store sales target in FY24.
  • Our NPAT forecast is unchanged for FY24 and rises by 4% in FY25. We retain an ADD rating and (login to view) target price.

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