By Stuart Condie

SYDNEY--Australian fast-food franchiser Domino's Pizza Enterprises will close another 172 loss-making stores in Japan, as its new chief executive reverses his predecessor's Covid-era expansion strategy in an effort to turn around performance.

ASX-listed Domino's on Friday said that it would close a total 205 loss-making stores across its global network, mostly in the June quarter. It expects to incur a one-off cost of about 97 million Australian dollars, or about US$61 million, and help generate A$15.5 million in annualized savings.

Domino's, which said it expects a first-half underlying pretax profit of A$84 million-A$86 million and an interim dividend of A$0.555 per share, had already planned to close up to 80 low-volume stores in Japan as part of a shake-up of its global operations.

"Some of our Covid-period expansion resulted in stores that simply weren't optimal based on our current customer proposition, and removing them will strengthen our network," , who previously held executive roles at food services company Compass Group and Coca-Cola

Van Dyck is trying to arrest a slump that forced U.S.-listed brand owner Domino's Pizza Inc. to suspend its own global store-growth guidance last year.

Domino's Pizza Enterprises, which operates in Australia and countries including France, Germany and Singapore, said it will provide an update on its Japan strategy at an investor day during the June half.

While its first-half underlying profit outlook is in line with guidance, Domino's said it will report a statutory loss due to the costs of closing stores.

Same-store sales were down 0.6% in the first half, but up 4.3% for the first five weeks of the second half, Domino's said. The company said it was continuing to simplify its cost base, and that a proportion of any savings would be directed toward network reinvestment.

Write to Stuart Condie at stuart.condie@wsj.com

(END) Dow Jones Newswires

February 06, 2025 17:17 ET (22:17 GMT)

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