Domino’s Pizza: Shutting Stores to Improve Store Economics Sets Back Network Expansion

Narrow-moat Dominos Pizza plans to support its average store economics by culling underperforming stores in two major markets, Japan and France. Dominos expanded its Japanese footprint too quickly during the pandemic, leaving it with too many immature stores struggling to break even with normalizing demand. To a lesser extent, the French network is also being rationalized. In April 2024, management flagged that network growth is unlikely in those jurisdictions before store profitability improves. For more details, please refer to our previous analyst note, 'Plan for Japan but No Quick Fix,' published on April 15, 2024.