Domino’s Pizza chief executive steps down amid plummeting profits

David Wild, the chief executive of Domino’s Pizza stepped down after leading the brand for over eight years. Though Wild would continue to serve the office till the time company appoints a new Chief Executive Officer. The recruitment process is said to be taken care of by the company’s outgoing chairman Stephen Hemsley. Hemsley too would exit the company once the new chairman is in place.

The replacement of two of the company’s top representatives came amid the Pizza brand’s ongoing struggle with decreasing profits in its overseas operations and a row over profit sharing among disgruntled franchisees in the UK and Ireland over commercial terms.

The US-based largest Pizza delivery chain has largest number of franchisees in United Kingdom and Ireland, amounting 63 and seven respectively. The two put together account for 39% of outlets.

In March, Domino’s announced that it would be replacing its CEO and Chairman due the revised corporate code of Financial Reporting Council, which raised the need for the company’s boards to be diverse with fresh outlook, besides having proper replacement of top jobs.

Wild said, “The performance of our international business is very challenging and trading visibility remains limited. The weakest performance was in Norway, although we also saw increasing losses in Sweden and Switzerland,” Mr Wild said.

The company, currently experiencing financial hiccups, reported that its profit in the first six months of the year declined to 30.5 million pounds from 41.7 million pounds made in the previous year. Besides, it is battling losses in its international business and trying to handle higher interest costs, which rose due to increase in net debt. The company is expecting a higher net debt of around 220 million pounds to 230 million pounds for this year. In 2018, the company’s net debt was 203.3 million pounds.

The company issued a statement, which read, “Whilst dialogue is continuing, new store openings are being delayed and some of our working practices are being impacted. The situation is complex and we expect resolution will take some time, likely into 2020.” Neil Wilson, an analyst from market.com said, “The update today doesn’t bode well for a swift resolution with management saying they do not expect a settlement until 2020.”

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