Australia’s largest pizza chain, Domino’s, is closing 60 underperforming stores worldwide and pivoting away from heavy discounting after posting a $300 million impairment loss. The financial downturn marks only the second annual loss for the company since its public listing more than two decades ago.
Domino’s Pizza is reckoning with a brutal financial realignment as a $300 million impairment on its balance sheet pushes the fast-food giant deep into the red.
Global Expansion Failures and Store Closures
The extensive write-downs stem primarily from the failure of aggressive overseas expansion. Operations in France and Taiwan alone contributed approximately $116.2 million in losses, forcing executive leadership to clean up overseas markets following mass store closures in Japan. Globally, the network is shedding 60 underperforming locations. The cuts include 29 closures across Australia and New Zealand, 25 stores in Europe, and six across Asian markets. Other impairments on the books stem from the permanent closure of 29 stores in Australia and New Zealand.
“A comprehensive review of the Company’s balance sheet has been undertaken to ensure the carrying values of our assets appropriately reflect current market conditions, our revised strategic priorities and the long-term outlook for each business,” executive chairman Jack Cowin said in a statement to the ASX.
Domino’s reported a statutory net loss after tax for the financial year 2026, driven significantly by non-cash impairments.
The End of Cheap Deals and the 70-Cent Price Hike
Alongside the physical downsizing, the company is fundamentally altering its sales strategy in the Australian market by turning away from cheap deals and heavily promoted bargain vouchers. Executive chairman Jack Cowin addressed shareholders regarding the shift away from promotional discounting, vowing in November that the company would turn its back on cheap deals and move towards a focus on profitability, not sales volume.
“The future of this company is not going to be built on the discounting or vouchering of the business.”
Jack Cowin, Executive Chairman
Cowin, an 83-year-old fast-food billionaire, dismantled a prior growth-at-any-cost strategy in favor of unit economics. The pivot prioritizes long-term franchisee profitability over raw headline sales volume. Simple menu adjustments, such as raising pizza prices by just 70 cents, have demonstrated an immediate capacity to lift store earnings.
Regional Performance Contrast
Same-store sales fell across every market during the 2026 financial year. The network experienced a 4.1 per cent drop systemwide across its 3,500-plus global network, driven by a 4.7 per cent decline in Australia and New Zealand, a 6.7 per cent fall in Asia, and a 2.2 per cent drop in Europe. Despite lower order volumes, the focus on pricing optimization and operational efficiencies successfully bolstered franchisee margins in select regions.
Western Australia emerged as an early success story for the turnaround strategy. Average store earnings in the state rose 30 per cent in terms of EBITDA, proving that higher margins could compensate for reduced transaction counts. New Zealand stores experienced a comparable trajectory, posting a 22 per cent improvement in profitability.
“The result reflects the Company’s deliberate transition towards profitable and sustainable sales growth, with long-term franchisee profitability prioritised over headline sales. During FY26, the Company focused on improving unit economics through pricing optimisation, promotional discipline and operational efficiencies rather than pursuing lower-margin transaction growth. While this resulted in lower same-store sales, franchisee profitability improved.”
Domino’s Pizza Enterprises, ASX Statement
Domino’s confirmed its earnings guidance at between $118 million and $122 million and committed to distributing a dividend grounded in underlying earnings.
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