Domino's Pizza has reported a fall in first-half profit of 19 per cent after customers in Europe and Asia remained cautious amid inflationary pressures.
The Australian pizza company said more work was needed to get the balance right in some international markets, with net profit after tax for the six months ended 31 December 2023 slipping to $57.7 million.
France and the Netherlands have proven difficult markets of late. Customers in France have made fewer visits to stores, while there has been a rise in labour costs in the Netherlands.
The business closed all 27 stores it had in Denmark, although these figures were not counted in earnings.
Domino's said trading conditions had been difficult in Asia. Sales promotions have helped make a better start to the second half of the financial year.
The company has been cutting staff to save money. While this may ease long-term costs, it has affected short-term earnings.
Domino's paid $7.6 million in employee termination costs during the first half. There was also $2.3 million in write-downs and net proceeds of disposal of assets.
The business is slashing $50 million in costs this financial year.
Looking ahead, there is hope on the domestic front. Australian and New Zealand operations had started the second half strongly.
Sales growth for the first seven weeks of the period was 8.39 per cent - the strongest in six years.
More than half of the Australian stores have expanded their trading hours to accommodate demand for lunch and late night orders.
New products such as the Domino's Box and Meltzz, both designed for delivery, have also been credited for the sales increase.
Chief executive Don Meij said these sales initiatives were gaining traction in international markets.
"They also show more is required to get the same results across all 12 of our markets," he said.
Shareholders will receive an unfranked interim dividend of 55.5 cents per share. This is lower than the partially franked 67.4 cents cents per share from this time last year.
On the local bourse, Domino's shares rose 2.27 per cent to end the day at $40.50.
