Domino's chief backs hype over pizza revolution
Domino's Pizza boss Don Meij has been forced to defend the hype leading to Monday's announcement that promised to "revolutionise" the nation's pizza industry, arguing his new range of premium toppings priced at $8 was indeed a "revolution".
Mr Meij also denied that he had misled the sharemarket and the media when, during an earnings briefing on February 13, he foreshadowed the new toppings launch by saying he had a product that would "revolutionise the Australian pizza industry".
Since the company's earnings presentation and roadshow in February, shares in Domino's rose from $9.95 to a record high last Friday of $11.55 - a gain of 16 per cent.
Shares in Domino's dropped 3.3 per cent in early trade on Monday as consumers prepared for their pizza revolution - fuelled by an intense social media campaign - and instead were greeted with the introduction of new premium toppings and square bases priced at $8 each.
"I definitely don't think we have misled the market," Mr Meij said.
"This is a significant change . . . when you can sell an $8 premium pizza with Peking duck, and blue cheese, pork belly ... you tell me in Melbourne right now where you can get an $8 pizza with that on it."
Domino's ended trading 11¢ weaker at $11.44.
Moelis & Co analyst Todd Guyot said he was unconcerned about the reported hype around Monday's announcement from Domino's, which turned out to be just a new product launch.
"Domino's have shown an ability over an extended period of time in driving like-for-like sales through promotional activity," he said.
"The share price trades on a high P/E so it doesn't take much change in sentiment . . . to knock the share price around, and the stock isn't particularly liquid. I think it's irrelevant in the bigger scheme of things."