For many years, Domino's Pizza Enterprises Ltd (ASX: DMP) shares were one of the ASX's most favoured growth stocks. Investors enjoyed stunning returns from an investment in Domino's, particularly between 2008 and 2016, and then again from 2019 to 2021.
To illustrate, the Domino's share price rose by an eye-popping 2,800% or so between November of 2008 and October of 2016, going from under $3 each to over $76.
Between 2016 and 2019, the company had a major slump, losing 50% of its value at one point. But then investors stepped on the gas again, sending Domino's shares from $38 in 2019 to $162 by September 2021.
But yet again, investors have had to ensure another major slump in the Domino's share price.
Today, the ASX 200 pizza icon is languishing at just $40.17. That's down 32.24% year to date, as well as down 21.19% over the past 12 months. Since its 2021 peak, the company has lost more than 75% of its value. Ouch.
Check that all out for yourself below for a visual representation of this company's changing fortunes:
The major catalyst for Domino's most recent woes was the company's poorly received trading update, released back on 25 January. It wasn't a happy pre-Australia Day for shareholders, with Domino's reporting slowing sales in countries like Japan, Taiwan and France, which contributed to an expected and significant fall in profits compared to the previous year.
Domino's told investors to expect a net profit before tax of between $87 million and $90 million, which was conspicuously below the $104.8 million reported in the prior year.
Upon this update's release, Domino's shares crashed more than 31%, and have only moderately recovered since.
But today, the company has outlined its plans to reclaim its glory days.
Image source: Getty Images
CEO Meij unveils growth strategy for Domino's
Domino's CEO Don Meij went through a new growth strategy in a presentation to shareholders this morning.
Meij started off by pointing out that Domino's is still a business operating in a considerable tailwind. He pointed to the US$1.22 trillion value of the global online food delivery market, which is expected to continue to grow at more than 10% per annum going forward.
But Meij also noted that although Domino's is the market leader in the pizza space in Australia and New Zealand, it still lags as a small part of the overall 'quick service restaurant (ASR)' market in these markets, and smaller still on an international level.
Meij has set a goal for Domino's to be the "dominant sustainable delivery QSR in every market by 2030".
Its main goal is to do so using 'segmentation', or providing foods for all occasions, not just its traditional pizza offerings. The company points to new ideas like 'meltzz' sandwiches in Australia and 'volcano' pizzas in Japan. It is also looking to build out "lunch boxes', chicken and chips, and rice bowls and pastas in order to expand its offerings and evolve how customers perceive the Domino's brand.
Domino's also highlighted a renewed focus on delivery, stating that "When people look at delivery, they somehow forget that we are in the food delivery business".
Using a franchise fortressing strategy, Meij is aiming for a sub-10 minute delivery time across its network. This 'fortressing' allows franchisees to stake a claim to a delivery territory with exclusive delivery rights. According to Meij, this will also facilitate at least a 30% reduction in delivery costs.
Investors are still selling Domino's shares
Perhaps some investors will find this strategy update from Domino's encouraging. However, the market is currently giving the company's plans a thumbs down. The Domino's share price closed on Friday down a hefty 7.51% to $40.17.
