Domino’s pulled its previous guidance for FY24 performance, and then, its share price dropped nearly 30%.
👉 Background: Domino Pizza Enterprises is the ASX-listed company that owns the master franchise for Domino’s Pizza in 12 countries, including Australia, New Zealand, Malaysia, France and the Netherlands.
👉 What happened: While Dominos' market capitalisation topped $14 billion during COVID, this is nearly 4 times its value today. And things may continue to go downhill for the pizza chefs at Dominos because it expects its first half net profit to drop from nearly $105 million to just $87 million this half.
👉 What else: But after this news, it got even worse. Domino’s pulled its previous guidance for FY24 performance. Next minute, its share price dropped nearly 30%.
💡Company guidance is a report that a public company will issue to shareholders to set expectations around upcoming financial performance.
💡 Analysts use these guidances to assess the current and future value of the company. The reason why it’s a ‘guidance’ is because things can always change. But generally, investors don't take too kindly to occasions when actual results underperform the guidance.
💡The only thing worse than missing your guidance… withdrawing your guidance.
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