The Domino’s Pizza Enterprises Ltd (ASX: DMP) share price is down 7% after the announced retirement of the CEO.
Domino’s is the ASX-listed company which has operations (including franchises) in a number of markets including ANZ, Europe and Asia.
CEO Don Meij to retire
Domino’s announced that Don Meij, CEO and Managing Director, will retire after almost 40 years with the company, including 22 of those as the CEO.
After retiring, Meij will work with the board and Mark van Dyck for the next 12 months. Mark van Dyck will succeed Meij on 6 November 2024. The appointment comes after a global search that looked at a number of different candidates.
Who is van Dyck?
Domino’s noted van Dyck served on the executive board of Compass Group, one of the world’s leading providers of food services, with a market capitalisation of $79 billion and operations across 33 countries. He was the regional managing director of Asia Pacific and oversaw 66,000 employees in 11 countries.
During his time at Compass, van Dyck “doubled underlying growth and significantly increased profitability.” Domino’s also restructured and accelerated growth and profitability of the Japanese business, and completed a strategic reset of the Australian business, making it one of the most profitable markets globally for Compass.
Before Compass, van Dyck was in executive positions at The Coca Cola Company for 14 years, including managing director of both the Australian and Irish businesses.
van Dyck has been an advisor to the Domino’s board for the last 12 months, so he’s already familiar with the business.
Trading update
Domino’s revealed a trading update for the first 17 weeks of FY25. It said group sale store sales (SSS) were down 1.2%, compared to a rise of 2.7% in the first 17 weeks of FY24.
Australia is “positively compounding” last year’s strong sales, while the Benelux region (which refers to Belgium, the Netherlands and Luxembourg) “successfully” launched a new brand campaign.
Singapore is “delivering two years of strong compounding sales growth” and Taiwan has returned to sales growth.
Now for the negatives.
German sales “remain negative” after cycling record sales from the prior year, but have “improved” since the August trading update.
French and Japanese sales also remain negative in the financial year to date, with “more work require in those markets to deliver positive sales.”
Final thoughts on the Domino’s share price
The Domino’s share price has plunged 47% this year and it has declined 80% from the COVID high in September 2021. That’s painful.
If the business can turnaround its momentum then it could be a contrarian opportunity. But, I wouldn’t bet on it. The food sector is a very competitive industry, and other online ordering platforms have caught up to Domino’s, it seems. Does Domino’s stand out in the crowd?
While the Domino’s share price could rise again, it wouldn’t be one of the first ASX growth shares I’d buy today. However, the new CEO does have a history of success, so it may be a positive leadership change.
