Domino's Pizza Enterprises: The Reset Is Delivered — Now the Hard Part: Rebuilding Order Count
After a year of deliberate volume reduction and cost cuts, DMP is pivoting to growth with a new CEO and a clear operating metric: average weekly order count.
DMP.AX · Earnings Call · 2026-08-25
A Year of Reset Delivered
Domino's Pizza Enterprises (DMP.AX) entered FY'26 with a stark warning from Chairman Jack Cowin: the business needed a reset. A year later, the results show that reset has been delivered—at least financially. Network sales fell 6.8% to $3.87 billion, and same-store sales declined 4.1%, but underlying EBIT rose 1.0% to $200.1 million and underlying NPAT increased 4% to $121.6 million. Free cash flow more than tripled to $164.1 million, net debt dropped from $724.8 million to $497 million, and net leverage fell from 2.57x to 1.86x. The dividend was raised 51.2%. These are the numbers of a company that deliberately stepped back from volume to repair its franchisee economics.
The reset is delivered, returns are improving, and FY '27 is about building profitable orders.
The reset was a conscious strategy to move away from a business model that, in Cowin's words, made DMP the "king of discounts"—selling product without sufficient margin. The company slashed promotional intensity, simplified pricing, and cut costs, realizing $35.3 million of an annualized $67 million in savings in FY'26. These savings were shared with franchisees, whose average store EBITDA rose 11.3% to $105,700—up from $95,000 the prior year. That's progress, but the global average is still well short of the $130,000 target that would restore a healthy 3–4x payback on new store build costs.
The New CEO and the Order Count Focus
Enter Andrew Gregory, a 30-year McDonald's veteran who took over as Group CEO in August 2026. Gregory's message was direct: the business has strong foundations, but sales momentum is not there. His priority is to "turn the tide on order count," a metric he intends to track with iron discipline.
“...regaining momentum and growing our baseline of average weekly order count will be the operating measure that I focus on as an absolute priority.” — Andrew Gregory, Group CEO and Managing Director · 2026-08-25
This is a subtle but significant shift in language. Previous quarters talked about "same-store sales" and "store profitability" in the abstract; now the company is anchoring on order count as the lead indicator. The reset deliberately reduced order counts—but at a cost: group same-store sales declined 2.5% in 1H and 5.7% in 2H, with the first 8 weeks of FY'27 running at minus 5.8%. The challenge is to rebuild order frequency without giving back the economics. As Gregory put it: "We need to turn stronger foundations into profitable customer growth."
Western Australia as a Playbook
The company's clearest test of a simpler value architecture is Western Australia. In September, DMP removed broad high-percentage discounting there, which improved ticket and store margins but cut orders more than expected. Subsequent adjustments—including a reduced delivery fee from $8.95 to $5.95—have begun to restore volume. Western Australia franchisee EBITDA is up over 30%, and carryout comps have turned positive, though overall state sales remain negative. The lesson, as CFO George Saoud explained, is not just about lower prices: it's about a "more deliberate value architecture" that differentiates customer occasions.
“The financial reset has been delivered. Second, franchise partner profitability is improving. Third, our balance sheet, liquidity and cash generation has strengthened materially. And fourth, the focus for FY '27 is clear: rebuilding profitable sales and order growth without giving back the economic gains achieved through the reset.” — George Saoud, Chief Financial Officer · 2026-08-25
This playbook is being applied across markets, but the company is deliberately measured. "Western Australia is much further ahead and Australia is somewhat further ahead," Gregory noted. The goal is to scale the approach with evidence, not from a one-size-fits-all template.
Balance Sheet Strength and the Impairment Caveat
The financial strengthening is real, but it comes with a significant accounting hit. The statutory result included a post-tax impact of $255.7 million from write-downs, chiefly goodwill and intangibles in France and Taiwan, plus technology assets and underperforming stores. These are largely non-cash, and they don't change the underlying economics, but they reflect a realism about the carrying values of businesses that have not delivered expected growth. Still, the balance sheet is in much better shape: net leverage is below the 2.0x target, interest coverage is 20.6x, and the company has $467.5 million in cash and undrawn facilities. The dividend increase signals confidence.
Interestingly, the delivery fee dynamics in Western Australia illustrate the balancing act. Lowering delivery fees from $8.95 to $5.95 drove double-digit volume growth in a trial, and the company is now monitoring conversion rates. But as George Saoud cautioned, it's early days. The company is also investing in marketing and technology—Coca-Cola becomes the exclusive beverage supplier in Australia next month, and a new permanent menu range (the New Yorker) is launching to target family occasions.
What's Changed—and What Hasn't
Comparing today's language with prior quarters, the shift is clear. In February 2026, Cowin was defending the WA trial and the loss of price-driven customers. He said: “Michael, we, with the WA result had, is driven by, and we can see this very clearly, the loss in sales for the price-driven customers.” — Jack Cowin, Executive Chair · 2026-02-25 That was the early, painful phase. By August 2025, the company was already telegraphing the pricing change, with Cowin noting: “I think the reality is that in making this change, you may get a reduction in sales in that the customer that we have weaned – trained to buy at a discount, he may take a while to swing around to here is a better, more convenient price.” — Jack Cowin, Executive Chairman · 2025-08-27 That transition is now behind them. The new CEO's focus on partner profitability and order count growth is the next chapter.
The company is not providing FY'27 earnings guidance, but the strategic intent is clear. The challenge is to rebuild order counts without reverting to margin-destructive discounting. If Western Australia is any guide, the new playbook can work, but it takes time. The market will be watching the average weekly order count trajectory closely.
In summary, DMP has executed a difficult but necessary reset. The balance sheet is strong, franchisee economics are improving, and the leadership is now aligned around a specific operating metric. The risk is that the reset's benefits are squandered if order growth fails to materialize. As the company enters FY'27, the question is whether it can turn a healthier unit economics into sustainable top-line growth. The stage is set, but the hard part—rebuilding profitable orders—has just begun.