Sept 9 (Askume) – Australian pizza chain Domino’s Pizza Enterprises (DMP.AX) has been hit with a shareholder class action lawsuit including allegations it misled investors about its expected 2021 results in Japan.
The pizza maker denied any liability in a market filing on Monday and said it would defend the legal action.
Its shares fell 2.8% to A$29.1.
Legal advisory firm Echo Law has filed the suit on behalf of Domino’s shareholders who acquired an interest in the company through equity swap confirmations between Aug. 18, 2021, and Nov. 3, 2021.
Echo Law said on its website that the class action lawsuit relates to an announcement made by Domino’s on November 3, 2021.
Domino’s said in a trading update on November 3, 2021 that its Japan business recorded “excellent mixed sales”, adding that new store openings in the country continued to grow steadily.
The pizza chain said in 2021, “Due to structural changes in marketing, pricing and store access, current sales and customer numbers remain significantly higher than the same period prior to the COVID-19 outbreak.”
The company has filed the suit in the Federal Court of Australia on behalf of shareholders, Echo Law told Askume in an emailed statement.
“The class action lawsuit seeks to redress the losses and damages suffered by shareholders as a result of Domino’s alleged conduct,” the company said in a statement.
In July this year, Domino’s Pizza decided to close low-selling stores in Japan and France, causing analysts to sharply lower their profit forecasts and its stock price to fall to the lowest point in more than nine years .
