Release Date: August 21, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: Can you provide insights on franchisee profitability in the second half of FY24 compared to the first half? A: Donald Meij, Group CEO, explained that the fourth quarter showed significant improvements due to various savings and initiatives. These improvements, particularly in food and labor, have continued into the current half, although specific numbers by market were not disclosed.
Q: Does achieving 3% to 6% same-store sales growth at a group level ensure earnings growth for FY25? A: Donald Meij stated that while the plan includes more than 3% same-store sales growth, additional levers such as corporate store network improvements and better food and labor margins also contribute to earnings growth. The company aims to deliver growth even without achieving the full same-store sales target.
Q: How much of the $50 million cost savings in FY24 actually benefited Domino's, and what about the $30 million target for FY25? A: Donald Meij clarified that less than two-thirds of the savings directly benefit Domino's, as some savings are reinvested into the network, such as advertising and software development. The exact amount benefiting Domino's was not specified.
Q: Are there more non-recurring costs expected in FY25 related to the restructuring in France and Japan? A: Richard Coney, Group CFO, indicated that while some costs will continue, particularly related to supporting franchisee store closures, these will be significantly less than those incurred in FY24.
Q: How does franchisee EBITDA vary by market, and what is the path to improving it? A: Donald Meij noted variability in franchisee EBITDA across markets, with lower performance in Taiwan and Japan. The focus is on improving execution and leveraging new tools to elevate performance across the network, aiming to reach historical highs seen during COVID.
Q: Why is there a change in the presentation of constant currency results compared to previous years? A: Richard Coney acknowledged the detail point raised and promised to verify with his team, ensuring that the presentation remains consistent with past practices.
Q: What factors contribute to the expected second-half growth in FY25? A: Donald Meij highlighted that while the first half faces headwinds, annualized savings from restructuring and increased media spend will drive growth. The second half will benefit from these initiatives, along with improved corporate store performance.
Q: Is there a risk of further store closures in Japan beyond the planned 79? A: Martin Steenks, CEO of Japan, stated that the closures are strategically planned to enhance profitability of surrounding stores, and no further closures are anticipated. The focus is on maintaining positive customer growth and market share.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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