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Dominos sales boom but profits gobbled up by franchisee support

Business

Dominos sales may have boomed during the global lockdowns but earnings at its Australia and New Zealand business fell by almost 6 per cent for the year to June 30 year after it propped up struggling stores.

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The Brisbane-based company said its overall earnings (EBITDA) were up 7.3 per cent to $303 million. Net profit after tax was $145.8 million, a rise of 3.3 per cent.

A dividend of 52.6 cents a share was declared.

The company is also continuing its expansion with plans for 5500 stores by 2033 and 200 stores this year. It expects about 3000 jobs in Australia.

The company, which rejected Government assistance through JobKeeper, described the result as a strong performance in an extraordinary year. It posted global sales of $3.2 billion, up almost 13 per cent with online sales growing a massive 21 per cent.

The earnings for Australia and New Zealand were $129.4 million with increased safety and franchisee investment impacting.

Sales in Japan also boomed with an increase of 26 per cent with a host of new outlets and the company has now lifted its long term goal 0f 1500 stores, an increase of 500.

Digital sales outpaced total sales growth.

Managing director Don Meij said $14 million had been spent to support stores during the pandemic.

“We cannot forecast how long this pandemic will last, now how it will impact sales or costs in the short term. But we do know it was the right decision to support our stories and franchisees where needed,” Meij said.

“While there is uncertainty in the broader economy we have certainty in our team and offering. We intend to use this period to strengthen our business by investing in more marketing and opening more stores, by investing in our people and in our technology offerings.”

Europe sales were up 5 per cent but earnings were down 1.5 per cent. Australia and New Zealand sales were up 4 per cent, but were impacted by the lockdown in New Zealand and changes to customer behaviour that had an uneven effect across stores.

Australia New Zealand, Nick Kn chief executive Nick Knight said the company decided to help franchisees with financial support as well as to provide personal protective equipment and additional sanitiser.

“These were the right decisions and we will not hesitate to repeat them throughout the pandemic.”

He said the company was aware this could impact short-term profits but it was the right thing to do for its people and the long-term success of the business.

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