Shares in Domino's have fallen sharply after Australia's largest pizza maker failed to meets its own sales and profit forecasts.
More than $850 million has been wiped from Domino's market value after it missed its own full-year profit and global growth targets, and forecast an easing in sales and profit ahead.
After troubles with its rollout in France cut Domino's European same-store sales growth to about half its forecast for 2016/17, the pizza chain is also facing higher costs in Australia after pledging to increase its workers' wages.
Shares in Domino's closed at an 11-month low of $41.50, down $9.61, or 18.8 per cent, and reducing its market value to $3.7 billion on Tuesday as investors punished the underperformance.
Domino's, which operates in eight countries, failed to meet its same-store sales targets in Australia, New Zealand, Europe and Japan for the 2017 financial year.
The biggest miss was in Europe, where same store sales rose 2.8 per cent, well below the company's forecast of between five and seven per cent.
Chief executive Don Meij said this was largely due to the group's French business, which suffered six months of online ordering troubles and a value range that did not resonate with the French.
"Both have now been fixed," Mr Meij said.
"We had some address input issues with French abbreviations and slang so customers would be coming to our site and it would be telling them that we weren't available to them."
Domino's warned it faces an easing in sales in the first half of the current financial year and slower profit growth for the full year.
That will come as the company lifts wages for employees as it continues to negotiate a new agreement with the retail workers' union.
Australia and New Zealand - Domino's largest market by earnings - had a 13.6 per cent lift in same store sales, below its forecast of 14 to 16 per cent.
Domino's blamed the decline on a drop in phone orders, caused by a lack of advertising of changes to its telephone number.
The company made a net profit of $102.9 million in the 12 months to July 2, up 25 per cent on the previous year, while earnings rose 28 per cent to $230.9 million.
Both profit and earnings missed Domino's guidance of 32.5 per cent growth, issued in February after a strong first half performance.
The company expects net profit to increase by around 20 per cent in the 2018 financial year - its weakest pace in four years.
Investment bank Citi's retail analyst Craig Woolford said the company's forecasts for 2017/18 had contributed to the share price plunge.
Easing sales growth and rising labour costs could also result in lower profitability for franchisees and reduce the attractiveness of the franchisee model, Mr Woolford said.
Allegations of staff underpayments have weighed on Domino's shares since the issue emerged in February.
The pizza maker also announced a $300 million share buyback, which will be funded through new and existing debt facilities.
DOMINO'S FAILS TO DELIVER:
* Full year net profit up 24.8pct to $102.9m
* Revenue up 15.4pct to $1.07b
* Final dividend up 6.1 cents to 44.9 cents, 50pct franked