There was margin compression that lowered EBITDA by 4%.
Domino’s CEO for Australia and New Zealand Nick Knight said that domestic growth was “softer” than anticipated with sales at $115.9m, up by 4.6%, and same store sales up by 2.4%.
In a statement to the ASX, the pizza chain cited “some margin compression, largely due to short term corporate store increase”, which lowered EBITDA by 4% to $127.9m.
With twenty-one stores opening this year, Knight says the management focused on delivering improved performance led by higher sales.
“We made strategic decisions this year that delivered a short-term headwind, which we are confident are for the medium- and long-term benefit of our hard-working franchisees, helping their continued growth,” he said.
“Through Operations 360, we have identified some of those franchisees who have demonstrated they no longer had the passion or capability to execute successfully as we grow. We have seen 22 under-performing franchisees exit the system, in some cases as a result of our compliance regime identifying deliberate underpayments of team members.”
Domino’s DOM Pizza Checker, which aims to help improve the quality of their pizza, was launched in May as part of their move to invest in technology and new marketing campaigns.
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