Domino's Pizza Group said today it would quit its loss-making international operations, sending shares higher in early trade.
The decision to exit four European markets comes a few months after the company announced CEO David Wild would retire, in the midst of a row with disgruntled franchisees in the UK and Ireland over commercial terms.
The company - which is itself a franchise of US-based Domino's Pizza Inc - owns Domino's operations in Switzerland, Iceland, Norway and Sweden, and owns a minority stake in its German operations.
"We have concluded that, whilst they represent attractive markets, we are not the best owners of these businesses," outgoing CEO Wild said.
Analysts said the move would allow Domino's to focus on its core British and Irish businesses and clear the deck for a new CEO to boost growth in those markets.
Domino's has struggled to control costs in its overseas business, especially in Norway, where it was converting the local pizza operator Dolly Dimple's stores it bought in 2017.
With 57 stores in Norway, the company set a turnaround plan in the country during the quarter but early signs from the plan were mixed and improvement in sales were weaker than expected, the company said.
Adding to the company's woes, Europe's economy has slowed this year as the US-China trade tensions weakened global growth, and consumers and businesses in and around the UK worried about the impact of Brexit on jobs and incomes.
"Although the impasse with the UK franchisees is ongoing, the decision to exit the loss-making international markets in an orderly manner releases one of the constraints on the share price," analysts said.
The company said third-quarter group system sales rose 3.4% to £313.5m on strong demand in the UK and Ireland.
Its Irish system sales were up 2.4% in local currency and it opened three new stores here in the three month period to bring its total here to 54.
However, the company's international system sales fell 2.7% and it also warned of a decline in tourist numbers in Iceland.
The company has 63 franchisees in Britain and seven in Ireland, with two of the largest franchisees accounting for 39% of stores.
"Normal working practices continue to be impacted by our franchisee dispute - this situation is complex and we expect a resolution to take time, certainly into 2020," Wild said on the profit sharing row.
The company said the search for a new chief executive continues while it also looks for a new chairman.