Investors have soured on Domino’s Pizza Enterprises after the US company that owns the brand warned of rising costs including a 30 per cent jump in mozzarella prices.
Shares in the ASX listed $6.1 billion Domino’s are down 43 per cent for the year and 6 per cent since Thursday, when the separately owned American company blamed soaring costs for missing quarterly profits. Its shares are off about 5 per cent since the opening trade on the New York Stock Exchange on Thursday.
“Domino’s, and other [quick service restaurants] are facing a conundrum on needing to lift prices to battle rising inputs like ingredients, but also maintain value to consumers who are also facing rising living cost,” Mr Woolford said.“The reality is all investors are grappling in a rebase of sales as economies reopen and what this means for consumer demand alongside higher interest rates crimping that demand.
Domino’s Pizza Enterprises accounts for about one-third of the US companies’ international sales. However, it finished fiscal 2022 with about 3380 stores, which suggests net new store openings of about 450 fell short of the company’s goal of 500.
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