The City lost its taste for Domino’s Pizza on Tuesday as the firm admitted its international business won’t break even this year.
Same-store sales for the past quarter fell 2% to £25.1 million in countries including Switzerland, Iceland, Norway and Sweden, which Domino’s has been trying to revive for some time. The business plans to tighten costs and invest less abroad as a result.
Shares crashed 17p, or 6%, to 243p.
Chief executive David Wild, who has been at loggerheads with UK franchisees over profit-sharing, said he was sticking by the international arm despite the bad news: “We’ve made a lot of management changes and it’s very early days to see the impact. We’re committed at the moment.”
He said he would update the market again at the half year in August.
Danny Cox, analyst at Hargreaves Lansdown, said: “A promised update at the half-year stage is unlikely to placate investors who have rightly been expecting to see the group’s turnaround efforts bearing fruit.”
Domino’s fared better at home, where it makes the majority of its money. Same-store sales rose 4.8%, albeit largely from price increases.
Group sales were boosted by Chicken & Chorizo pizzas and its 650-calorie Delight range, rising 4.5% to £324.4 million for the 13 weeks to March 19. It also made record sales online so far this year.
The business, which is facing increased competition from the likes of Uber Eats and Deliveroo, had been opening stores apace.
Wild has been disputing with franchisees, who have formed an association and threatened to open fewer stores unless they can keep more of the profits. This ongoing ruckus led to a slowdown in store openings. Wild said the company is in “constructive discussions” and “the key thing is to find a way to grow sales”.
