Domino's Australian Franchise Operator Posts First Annual Loss, Shares Fall 21%

Domino's Australian franchise operator has reported its first annual loss, with shares falling 21%. The company's net sales break down into operation and management of supply centers (60.5%), operation of restaurants in the US (32.8%), and operation of restaurants outside the US (6.8%). The loss is attributed to increased competition and a decline in sales.

Domino's Pizza Enterprises, the Australian franchise operator of the U.S.-based Domino's Pizza, has reported its first annual loss since going public two decades ago. The company posted a net loss of A$3.7 million ($2.40 million) for the 2025 fiscal year, marking a significant decline from the profit of A$96 million recorded last year. This loss was attributed to increased competition, a decline in sales, and ongoing weak performance in key markets such as Japan and France.

The company's shares slumped by 21%, reaching their lowest point since July 2, with the stock being the worst performer in the broader ASX 200 benchmark index. The net loss was primarily driven by a 4.6% decline in underlying earnings before interest and tax (EBIT) to A$198.1 million, equivalent to US$128.7 million. Revenue fell by 3.1% to A$2.3 billion, with network sales decreasing by 0.9% to A$4.15 billion.

Domino's Pizza Enterprises has been facing several challenges, including intense competition from delivery platforms and the emergence of rivals such as the Sydney-listed burrito chain Guzman y Gomez. The company has also been struggling with waning post-pandemic demand and rising input costs, particularly in Japan, where it closed 233 loss-making stores earlier this year. The company's strategic store closures and cost-efficiency programs are aimed at improving franchisee profitability and enhancing digital capabilities.

The company's management changes, including the planned departure of CEO and Managing Director Mark van Dyck before Christmas, have also contributed to investor concerns over the strategic direction of Australia's largest pizza player. Executive Chair Jack Cowin, founder of Hungry Jack's, has since assumed the role of executive chair, and the company has warned of a bleak start to the new financial year, with like-for-like sales declining 0.9% in the first seven weeks.

Domino's Pizza Enterprises declared a final dividend of 21.5 Australian cents per share, bringing the full-year payout to 77 cents per share, a decline of about 27% compared with the prior year. The company has stated that progress has been made in identifying and delivering cost savings, with the benefits to be reinvested in franchise partner economics, working media investment, and improving digital and data capabilities.

References:
[1] https://www.reuters.com/world/asia-pacific/dominos-australian-franchise-operator-swings-first-annual-loss-shares-fall-21-2025-08-27/
[2] https://www.newsbreak.com/reuters-555486/4198567305327-australia-s-domino-s-pizza-swings-to-annual-loss-shares-fall
[3] https://www.marketwatch.com/story/domino-s-pizza-enterprises-says-annual-earnings-decline-amid-strategic-reset-update-9613839d