BENGALURU (Reuters) - Australia's Domino's Pizza (NYSE:DPZ) Enterprises said on Wednesday it expects store growth to be flat to slightly positive in its current fiscal year, and decided to close up to 80 low-volume stores in Japan and 10-20 stores in France.
Domino's Japan had opened over 400 stores between financial years 2020-2023, which resulted in a number of "immature stores". Moreover, higher media costs and lower advertising funds led the company to undertake a review of its store locations.
"The aggregate contribution of these low-volume stores is loss-making and the closures will have a positive impact on earnings, which will be reinvested into additional marketing and advertising to reach more customers and lift order counts in this low-frequency market," the company said in a statement.
The pizza-maker expects a return to positive same store sales in Japan in financial year 2025 that started this month, and sees overall group store growth of 3%-4% in fiscal 2026.
The company added that the long-term outlook for its markets "remains appropriate", particularly due to possible additional upside in large markets such as Germany.
The retail food outlet operator is due to report its annual results in August. It had withdrawn its fiscal 2024 outlook in January, after its first-half profit forecast missed expectations, hurt by weaker-than-expected network sales in Asia and Europe.