The Domino's Pizza Enterprises Ltd (ASX: DMP) share price plummeted 20.87% on Wednesday morning. At the time of writing, the shares are changing hands at $15.32 a piece.
For context, the ASX 300 Index (ASX: XKO) is 0.21% higher at the time of writing this morning.
The sell-off follows the company's FY25 financial results, which it posted this morning.
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Domino's share price nosedives on FY25 result
Here are the key numbers:
- Network sales down 0.9% to $4.15 billion
- Revenue down 3.1% to $2,303.7 million
- EBIT down 4.6% to $198.1 million
- Final dividend of 21.5 cents per share
What happened?
For FY25, which ended 29 June, the ASX 300 fast-food Pizza operator reported a 0.9% drop in network sales of $4.15 billion. Revenue was also 3.1% lower at $2.3 billion for the group and 2.5% lower at $775.5 million for the group's ANZ segment.
The group's underlying EBIT decreased 4.6% over the period, although the company's ASX and EU segments posted growth of 5.2% and 3.1% respectively. ANZ's EBIT growth was driven by "menu simplification, core pizza focus, and targeted promotions", which helped deliver the strongest AU franchisee EBITDA in three years.
However, higher global overheads (-14.2%) offset segment gains and a sharp decline in Asia (-32.6%), primarily due to Japan.
Domino's Pizza declared a final FY25 dividend of 21.5 cents per share unfranked, equivalent to a payout of 35% for the final dividend. The company also announced it would maintain its dividend reinvestment plan (DRP) but remove the underwriting feature.
"This preserves an avenue for investors who wish to compound their investment at a time when the Company's share price does not fully reflect its long-term potential," Domino's said.
The DRP will apply to Domino's FY25 final dividend amount. Eligible shareholders who elect to participate in the DRP will be issued shares at a 1.0% discount to the average daily volume weighted average price for the Company's shares over the 10-trading day period commencing on 8 September 2025. The dividend payment date is 3 October 2025.
The company is undergoing a "strategic reset" to improve profitability by simplifying operations and focusing on franchisee profitability. Strategic store closures, particularly in France and Japan, are key to this reset.
Management commentary on the results
Domino's executive chair Jack Cowin said the business is concentrating on the fundamentals – quality food, strong service, compelling value – while making the structural changes necessary to compete and grow in a changing environment.
"We're taking action to make Domino's a leaner, more efficient business. That means reducing costs – and using those savings to support our franchise partners and invest in marketing that drives sales. We will share the rewards when we get it right – with customers, with partners, and with shareholders."
Domino's also confirmed an updated capital management approach. It said it is prioritising deleveraging and optimising growth, to ensure earnings are directed toward paying down debt and reinvestment during its "strategic reset" phase.
"The Board believes a lower payout is prudent in the current context and aligned with long-term shareholder value creation," the company said in its announcement.
