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Domino’s Pizza Enterprises Ltd’s German expansion is on track for now

This morning Australian pizza franchisor Domino’s Pizza Enterprises Ltd (ASX: DMP) announced it has completed the acquisition of Germany’s Hallo Pizza business that owns 170 stores across Europe’s largest economy.

After Domino’s rip-roaring success in Australia the pizza delivery store market got saturated, so Domino’s management looked overseas to Japan and then Europe to satisfy an insatiable growth appetite.

The Japanese operations have proven challenging at best, with flat same-store sales growth not a result Domino’s investors are used to.

In Europe, the group is aiming to grow store count across France and Germany while really lifting the bottom line by expanding margins to get them more in line with its Australian operations. The direction of the share price over 2018 will depend heavily on the progress of its overseas operations.

At its recent AGM the group reaffirmed forecasts for FY 2018’s total net profit growth to be around 20% compared to underlying results in FY 2018.

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Motley Fool contributor Tom Richardson has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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