By Himanshi Akhand
(Reuters) – Shares in Australia’s Domino’s Pizza (NYSE:) Enterprises posted a file drop on Thursday, after the retail meals outlet operator withdrew its fiscal 2024 outlook and its first-half revenue forecast missed expectations.
The inventory slumped as a lot as 31.1% to A$39.50, its lowest since August 2019, and was the highest laggard on the benchmark index, which was up 0.3% as of 0038 GMT.
After market hours on Wednesday, Domino’s mentioned it anticipated first-half preliminary web revenue earlier than tax between A$87 million ($57.19 million) and A$90 million, damage by weaker-than-expected community gross sales in Asia and Europe.
“With enhancements nonetheless required in H2 to develop order volumes… any earlier steering for FY24 efficiency, de facto or in any other case, is now not in impact,” Domino’s mentioned.
It had earlier mentioned it anticipated earnings in fiscal 2024 to be considerably greater than 2023 because it continued to chop prices.
The corporate’s first-half forecast was 12% to fifteen% under Seen Alpha consensus estimates, prompting brokerages to slash their scores and earnings estimates.
Analysts at Citi downgraded the inventory to “Impartial” from “Purchase” on account of elevated uncertainty round Japan and France outlook, which collectively represent about 39% of the group’s shops.
The brokerage additionally trimmed its earnings per share estimates by 8%-19% for fiscals 2024 to 2026.
“We anticipate the magnitude of the deterioration in SSS (identical retailer gross sales) in Asia and Europe to overshadow constructive feedback round bettering common unit economics in ANZ and Europe.”
Jefferies analysts additionally downgraded Domino’s to “Underperform” from “Maintain”, noting that “market persistence is operating skinny”.
Morgan Stanley, nonetheless, stored its “Obese” score, anticipating the corporate to ship earnings development within the second half.
Domino’s share value had slumped about 44% and 11% in 2022 and 2023, respectively, and Thursday’s decline brings 2024 year-to-date losses at practically 30%.
($1 = 1.5211 Australian {dollars})