Domino’s Australia Stock Soars 24% After Announcing Store Closures and Profitability Boost

Shares of Domino’s Pizza Enterprises (NYSE: DPZ) surged 23.8% to A$36.68 on Friday, marking their largest intraday gain ever. The rally follows the company’s announcement to close 205 underperforming stores, aiming to enhance profitability and strengthen its market position.

The store closures, expected to save A$15.5 million ($9.74 million) annually, include 172 locations in Japan, where Domino’s has struggled with declining post-pandemic demand and rising costs. Japan, which comprises a quarter of the company’s 3,733 stores worldwide, has been a challenging market.

CEO Mark van Dyck stated that some COVID-era expansion efforts led to stores that no longer align with the company’s strategy, and their removal will fortify operations. The Japanese closures will incur a one-time restructuring cost of A$61.8 million but are projected to boost operating earnings by A$10 million to A$12 million annually.

Domino’s also reported strong momentum in the second half of fiscal 2025, with same-store sales growing 4.3% across the group in the first five weeks. Analysts view this as a strategic move to future-proof the company and drive long-term growth.

For the first half of fiscal 2025, Domino’s expects underlying net profit before tax between A$84 million and A$86 million, aligning with its prior forecast. The company will maintain its interim dividend of 55.5 Australian cents per share.

With a clear strategy to optimize operations, Domino’s is reinforcing its market leadership and setting the stage for continued revenue growth.