Network sales: +11.1% to $2.05b

• Online sales: +11.5% to $1.6b

• EBIT: -5.7% to $144.7m

• Underlying NPAT (after Minority Interest): -5.3% to $91.3m

• Asia: Added 10th market (Taiwan +156 stores) and added +87 organic stores. Sales grew +16.4% despite lifting of State of Emergency in Japan. EBIT -17.3% reflecting rebasing of Japan sales and accelerated corporate store openings compressing margins

• Europe: Regional sales (+11.9%, to $796.7m), with franchisees rising to COVID conditions by growing delivery sales through improved execution. EBIT grew +11.5%, to $49.7m

• ANZ: Multiple stores set records as Network Sales grew (+6.4% to $689.6m). EBIT -6.1% to $60.3m reflecting investment in franchisees (Project Ignite ~$6m) and temporary closure in New Zealand.

Domino’s Pizza Enterprises Ltd (ASX.DMP) is planning a record Full Year expansion of its store network2, as the Company and franchisees reinvest in their shared, long-term strategy.

In the first Half, the Company and its franchisees added +285 stores, (+156 acquired in Taiwan, +129 organic), and is on track for a ~500 store expansion3 this financial year.

Asia added +87 organic new stores, including +5 in Taiwan, Europe expanded by +39 stores, and Australia/New Zealand added +3 new stores. Following the commencement of Project Ignite, 19 corporate stores in Australia were refranchised to existing store managers and franchisees.

Group CEO & Managing Director Don Meij recognised the ongoing efforts and performance of more than 80,000 team members and franchisees, who had served their communities in some of the most challenging conditions the COVID-19 pandemic has imposed so far.

Despite the ongoing effects of COVID-19 in each of Domino’s 10 markets, Domino’s has reiterated the Company’s long-term store milestones, 3-5 year outlook for new stores openings (+9-12%) and same store sales (+3-6%), noting sales growth this year is expected to be slightly below this range.

Domino’s H1 earnings results were lower than the prior comparable period largely due to investments in Project Ignite (ANZ) and a rebasing of sales in Japan in Q2. The latter followed record growth that meant Japan same store sales remained +40% higher compared to pre-COVID-194.

Just two years after Domino’s served $3 billion in global food sales ($2 billion online), the Company expects this year to reach $4 billion in global food sales, with more than $3 billion online.

“It remains our intention to deliver another strong year of profit – a result of our long-term investments that accelerated during COVID-19,” Mr Meij said.

Pretty savage reaction to the earnings miss. Fallen now from a very inflated high of around $167 a few months ago. I’ve found it hard to value this one. Global growth company with a good track record and seemingly a long runway ahead but missed expectations a couple of times in a row now.

Disc: Not held but on watchlist