The Domino's Pizza Enterprises Ltd (ASX: DMP) share price is down 58% in the year to date.
As my colleague Zach recently reported, Domino's shares are now trading around 52-week lows.
At the time of writing, the Domino's share price is $52.12, not far above its 52-week low of $49.83.
It's been a tough ride for shareholders. But at least you'll get a discount on your next order.
30% discount on pizza for shareholders
Domino's is offering its shareholders a 30% discount on all large premium and traditional pizzas.
The deal, called 'Shareholder Pizza Perks', was sent out last week.
Shareholders received a personalised discount code to use on up to 25 orders between now and 1 December 2023. There is a minimum $22 spend on delivery orders.
Dominos share price struggles through 2022
Domino's had a fantastic run during the first two years of COVID-19.
Lockdowns meant more people ordered in, which pushed up Domino's earnings and shares. The Domino's share price reached an all-time high of $164 in September 2021.
Domino's was among a bunch of ASX shares that were COVID winners. But lockdowns were a short-term tailwind, so the share price has come back to Earth.
Before COVID hit, Domino's shares were trading at about $62 apiece. Today, they're trading considerably lower than that arguably because of two new challenges — rising inflation and interest rates.
Both stop consumers from spending, and inflation raises the costs of production, meaning a smaller margin for Domino's even if it raises its pizza prices.
Domino's reported a 4.6% bump in sales globally in its FY22 results released in August. But it experienced a 12.5% decrease in after-tax profit to $165 million.
As my colleague, Zach points out, this is a classic impact of inflation. Businesses enjoy greater revenue because they're selling their products for higher prices. But they're also paying more for the inputs to make those products, which can reduce their margins and hence their earnings.
What else is happening at Domino's?
In August, Domino's shelled out $214 million to buy 287 corporate stores in three new markets – Malaysia, Singapore, and Cambodia.
Investors liked the move and the Domino's share price moved up 7.2% on the day of the announcement.
Back on 23 September, Zach reported that brokers were still advocating Domino's shares.
Seven out of 14 analysts were recommending Domino's as a buy and seven were recommending to hold, according to Refinitiv Eikon data.
The consensus price target from those 14 brokers was $79.57, down from $89.35 in June.
Citi, for one, is bullish. The broker has a price target of $84.40 on Domino's shares.
If Citi is right, then investors buying into the pizza chain today are in for a gain of almost 65% over the next 12 months.
