Domino's writes down A$259m as sales fall 4.1%

Domino's recorded A$259 million of mainly non-cash write-downs as FY26 same-store sales fell 4.1%. Free cash flow rose to A$164m; net leverage fell to 1.9x

Sarah Mitchell · July 31, 2026 · 3 min read

Domino's writes down A$259m as sales fall 4.1%

Domino's recognised about A$259 million of largely non-cash write-downs as group same-store sales fell 4.1 per cent in FY26. The group gave preliminary underlying net profit after tax of A$118 million to A$122 million, said free cash flow improved to about A$164 million and net leverage had fallen to about 1.9 times EBITDA after a refinancing. Management reiterated it expects to pay an underlying dividend and flagged plans to roll the Western Australia operating model out nationally. "The future of this company isn't going to be built on the discounting or vouchering of the business," executive chairman Jack Cowin said.

"FY26 has been a year of disciplined execution," George Saoud, Domino's COO and CFO, said as the company outlined the numbers behind the balance-sheet reset. But management told the market the A$259 million of asset write-downs mainly reflect underperforming international operations, information-technology investments and store assets, and that the adjustments are largely non-cash. They said the charges won't impair debt covenant compliance or the group's ability to generate cash after the refinancing of its banking facilities. The refinancing, combined with improved cash flow, left net leverage at about 1.9 times EBITDA at the end of the year. Domino's reported free cash flow of roughly A$164 million for FY26, up about A$116.6 million year on year. That cash outcome is what several analysts and market accounts called the clearest evidence that near-term liquidity has been repaired and the group can focus on improving store economics rather than chasing volume. Group same-store sales declined 4.1 per cent for the year, with regional falls of 4.7 per cent in Australia and New Zealand, 6.7 per cent in Asia and 2.2 per cent in Europe. Management said that headline sales weakness was an intentional trade-off as the company tightened promotional activity and pulled back from low-margin volume. The strategic trade-off appears to have improved franchise economics. Rolling 12-month franchisee EBITDA rose by about 11.3 per cent on a constant currency basis. Domino's pointed to a Western Australia operating model pilot that increased average store EBITDA by more than 30 per cent over a five-month pilot period despite lower volumes. The company confirmed structural changes to the store network, including the permanent closure of 29 underperforming stores across Australia and New Zealand, and said it will close additional underperforming sites overseas as it winds back aggressive international expansion that had failed to pay off. Company commentary and market reporting linked substantial losses in France and Taiwan to a large portion of the impairments; one report quantified the French and Taiwanese operations as contributing about A$116.2 million of losses. Management also said annualised cost savings from a transformation program are expected to be in the A$60 million to A$70 million range. Domino's reiterated underlying earnings guidance in the A$118 million to A$122 million range for FY26 and flagged it expects to pay an underlying dividend. The board has made at least one senior governance change, appointing Uschi Schreiber as deputy chair after her service as a non-executive director. Market reaction was mixed. Domino's share price has fallen sharply from its late 2021 peak above A$160 to around A$17, reflecting investor concern about overexpansion and the margin hit. At the same time, the strong cash flow outcome and lower leverage convinced several analysts that management now has the runway to roll out the WA operating model nationally and extract further cost and technology efficiencies. Management told investors the write-downs are largely non-cash and that the business entered FY27 with improved cash generation and lower net debt.