Domino’s “rebasing” of sales is only one of the challenges facing the company over the next two years in our view. The company and franchisees face higher costs and store rollout could slow. The cost pressures that have built in the past six months are likely to lead to some margin pain for Domino’s as it preferences store rollout and market share growth.

We initiate coverage of Harvey Norman. The company’s earnings have benefited from elevated demand and tight cost controls over 2020 and 2021. Earnings will fall over the next three years, but we expect margins to remain higher than pre-COVID-19 levels given market structure, store rollout and cost management. In Australia, we expect margins to remain firm given the more concentrated market structure, tight product supply and stringent control on costs the company has maintained over the past two years. The company’s sprawling retail network overseas now accounts for one-quarter of its group earnings and with further rollout in each major country, its share of earnings will rise over the next three years. Offshore stores will rise from 107 today to 121 by FY24e.