Domino's Pizza Enterprises Limited

Reported first-half NPAT was $60.1 million, up 2.2% year over year. EBIT was $101.5 million, up 1%, on network sales of $2.04 billion; same-store sales declined 2.5%. Free cash flow was $70.6 million, up $40.6 million versus the prior corresponding period. Average franchisee store EBITDA increased 4.5% to $103,000, the highest level in three years. Total debt was reduced by $196.1 million, net debt by $114.2 million, and net leverage fell to 2.21x with interest coverage at 19.8x. The interim dividend was increased to $0.25 per share. For FY26, management said full-year results should be in line with AGM guidance and market expectations at that time, and later clarified it is looking to beat the consensus at that time. Management also guided to 20 to 40 new stores over the next 12 to 18 months and said the average franchise profitability target remains around $130,000.

Jack Cowin framed the quarter as a deliberate reset away from “discount business” and toward a returns-led model, saying the company is rebuilding pricing discipline and aiming to make more money for franchisees. His tone was confident and dismissive of short-term same-store sales pressure, repeatedly stressing that the business is changing materially and that the priority is profitable traffic, not growth at any price. He said the model is working because franchisee profits, cash flow, and the balance sheet are improving, and that growth should follow once economics are fixed.

George Saoud emphasized that the half was about strengthening unit economics, simplifying the system, and funding the reset from within. He cited NPAT of $60.1 million, EBIT of $101.5 million, free cash flow of $70.6 million, debt reduction of $196.1 million, net debt reduction of $114.2 million, net leverage of 2.21x, and interest coverage of 19.8x. He also said the cost-out program has $55 million of savings actioned toward a $60 million to $70 million annualized target, with Phase 2 expected to deliver another $15 million to $25 million annually, and that the average franchise profitability target remains around $130,000.

Analysts focused on guidance clarity, the softness in same-store sales, the WA pricing trial, the pace and sharing of cost savings, the relationship with Domino’s Pizza Inc., and regional issues in Japan and France. Management said it is currently looking to beat consensus for FY26, that WA’s lower-volume trial should improve franchisee economics even if it pressures near-term warehouse volume, and that sensible promotions are being reintroduced to recover traffic over the next 6 to 12 months. On DPZ, management described the relationship as supportive, and on Japan and France it acknowledged further work is needed, with Japan still burdened by post-COVID complexity and France needing better execution and simpler offers.