Domino’s has appointed Andrew Gregory as the new group CEO. He brings significant experience in quick-service restaurants, having spent three decades at McDonald’s. He joins Domino’s by early August 2026, following the January appointment of a new regional CEO for ANZ.

Why it matters: The global search for a new CEO is over, and leadership uncertainty is greatly reduced. Since the departure of former CEO Mark van Dyck in July 2025, chairman and substantial shareholder, Jack Cowin, has served as interim executive chair.

  • Andrew Gregory brings experience relevant to Domino’s network. In his most recent role, he was responsible for the franchising strategy and restaurant development of McDonald’s global network of 45,000 restaurants. He also had a stint in Japan, a key market for Domino’s.
  • His experience is also relevant for the key focus areas of Domino’s turnaround strategy. We expect Gregory to focus on improving franchisee profitability and strengthening the customer value propositions to reignite the global store rollout.

The bottom line: Our earnings estimates are unchanged, and we maintain our AUD 41 fair value estimate for narrow-moat Domino’s. Shares are materially undervalued. Turning around sales momentum is likely a multiyear exercise, but we believe a lot would have to go wrong to justify the market’s pessimism.

  • We estimate shares are pricing in a recovery in operating margins from depressed fiscal 2025 levels, but this is not prompting franchisees to open stores. While the strategy shift to everyday value pricing likely constrains near-term growth, we forecast profitability to rebound from fiscal 2027.
  • We expect improving franchisee profitability, underpinned by strengthening same-store sales growth from a reset sales base and cost-cutting, to revive demand for new stores, resulting in a 14% compound annual growth rate in earnings over the next five years.

Domino’s Pizza Enterprises strategic reset creates uncertainty but long-term upside remains

Domino’s Pizza Enterprises is the Australian master licence holder of the Domino’s Pizza brand. It also has operations in New Zealand, Japan, Singapore, Malaysia, France, Germany, Belgium, Luxembourg, Taiwan, Cambodia, and the Netherlands. The stock suits investors seeking exposure to the food and beverage sector. Management is active, importing marketing strategies from the United States, or creating new ones, and applying them to local trends in individual markets. Management has adapted to market trends by refreshing the product range, including healthier ingredients and gourmet styles, and transitioning to online ordering.

As a master franchisee, Domino’s has limited capital requirements, which means royalty payments it receives in the future should continue to be paid as partially franked dividends. This makes returns on invested capital very attractive. Brand and scale are key competitive advantages warranting a narrow economic moat rating, and future growth prospects are significant. Despite significant growth during recent years, Domino’s is by no means a mature business. Australia can still increase its store base by about one-fifth in the next few years, and European growth is much more substantial, with the potential to add two-thirds to the existing store base to around 2,200 outlets during the next decade.

Risks include a change in consumer taste for pizza as a food category and growth execution risk, particularly with differences between Australian, Asian, and European business environments. Good management can navigate these changes. McDonald’s modified its menu in response to an increasingly health-conscious society; we see this as a perfect example of a food business changing with the times.

Bulls say

  • Domino’s is a highly visible brand based on a successful US business model. Across Domino’s three regions, sales have increased at a CAGR of 5% over the past five years. We expect a network sales CAGR in the midsingle digits over the next five years.
  • The pizza market in Europe is highly fragmented, presenting a significant opportunity for Domino’s to take market share with an attractive value proposition, increased convenience to the customer, and a differentiated product offering.
  • The company’s large network size has positive implications for discounted supplier arrangements.

Bears say

  • There is a high level of competition, stemming from independent pizza stores and other quick-service restaurants.
  • The company might evaluate its target markets in new countries incorrectly, given the geographical distance and cultural variances.
  • The low-price business model may still be affected by slowing retail and discretionary spending.

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Terms used in this article

Star Rating: Our one- to five-star ratings are guideposts to a broad audience and individuals must consider their own specific investment goals, risk tolerance, and several other factors. A five-star rating means our analysts think the current market price likely represents an excessively pessimistic outlook and that beyond fair risk-adjusted returns are likely over a long timeframe. A one-star rating means our analysts think the market is pricing in an excessively optimistic outlook, limiting upside potential and leaving the investor exposed to capital loss.

Fair Value: Morningstar’s Fair Value estimate results from a detailed projection of a company’s future cash flows, resulting from our analysts’ independent primary research. Price To Fair Value measures the current market price against estimated Fair Value. If a company’s stock trades at $100 and our analysts believe it is worth $200, the price to fair value ratio would be 0.5. A Price to Fair Value over 1 suggests the share is overvalued.

Moat Rating: An economic moat is a structural feature that allows a firm to sustain excess profits over a long period. Companies with a narrow moat are those we believe are more likely than not to sustain excess returns for at least a decade. For wide-moat companies, we have high confidence that excess returns will persist for 10 years and are likely to persist at least 20 years. To learn about finding different sources of moat, read this article by Mark LaMonica.