Domino’s Pizza Enterprises Ltd (ASX: DMP)
Domino’s Pizza Enterprises Ltd (ASX: DMP), on 25 February 2025, announced its half-year financial results for FY2025. The company posted an EBIT of $100.6 million, which is 6.7% lower compared to the same period last year but slightly higher (0.7%) than the previous half-year. Strong growth in Australia contributed significantly, with EBIT rising 7.6% to $67.7 million. However, Asia and Europe faced challenges, with EBIT declining by 19% and 11.1%, respectively. Key issues were underperformance in Japan and France, which the company is actively addressing. The company has shut down 205 underperforming restaurants, of which 172 are in Japan, as part of a wider move to streamline operations and save costs.
The company experienced a slight drop in network sales by 2.9% to $2.08 billion, influenced by foreign exchange effects and store closures. Same-store sales (SSS) also declined by 0.6%, compared to a 1.3% increase in the prior year. Even this, Australia and New Zealand managed modest growth (+0.6% SSS), driven by strong product offerings and operational efficiency. The Benelux region showed positive results with a new branding campaign, while Germany showed improvement after a successful promotional period in the previous year. In contrast, France’s performance remained weak, requiring targeted strategies for recovery.
The company is focusing on cost control and growth through strategic initiatives. Franchisee profitability improved by 13.7%, reflecting the benefits of operational changes. Domino’s aims to strengthen its market position by enhancing customer experience, offering consistent pricing, and optimizing its store network. The board announced an unfranked interim dividend of 55.5 cents per share, the same as last year. Overall, Domino's is trying to enhance profitability, build stronger franchise relationships, and develop sustainable growth regardless of current worldwide challenges.
Treasury Wine Estates Ltd (ASX: TWE)
Treasury Wine Estates Ltd (ASX: TWE), on 13 February 2025, reported strong financial performance in the first half of fiscal 2025, driven by its Luxury-led strategy. The company’s Earnings Before Interest and Taxes (EBITS) rose 35.1% to $391.4 million, with an improved margin of 25.3%. Luxury brands, particularly Penfolds and DAOU, performed exceptionally well, contributing significantly to Net Sales Revenue (NSR), which grew 5.1% organically. Despite challenges in the Treasury Premium Brands segment, TWE’s overall growth was supported by strong demand for premium wines, especially in Asia, where the re-establishment of the Australian COO portfolio in China boosted sales. The company expects full-year EBITS to be around $780 million, at the lower end of its previous guidance due to softer performance in the Premium segment.
TWE’s balance sheet showed solid growth, with net assets increasing by $263.4 million to $4.87 billion, partly driven by foreign currency impacts. Working capital rose due to higher receivables linked to NSR growth, while inventory levels were adjusted strategically—total inventory volume decreased by 15%, but the overall value rose 4%, reflecting increased investments in Luxury wines. luxury inventory surged by 13%, supported by strong vintages and increased stock for key brands like Penfolds, DAOU, and Stags’ Leap. The company also completed the acquisition of vineyard and production assets in China for Penfolds, further strengthening its global presence.
TWE maintains an efficient and flexible structure with net debt/EBITDA at 2.0x. The company has $1.2 billion in available liquidity, comprising cash and undrawn facilities. A key focus remains on returning value to shareholders, with a 17.6% increase in the interim dividend to 20 cents per share, reflecting a payout ratio of 68%. Capital expenditure for the period was $78 million, with investments in sustainability, vineyard expansions, and low/no-alcohol wine technologies. TWE remains confident in its long-term growth strategy, mainly in Asia and the Americas, while optimizing its Premium division for future success.
(Source: Company's Report)
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