A record breaking Valentine’s Day for orders of the likes of Pepperoni Passion and Hot & Spicy toppings could not save Domino’s Pizza from limp sales and falling profits as even demand for takeaways felt the squeeze from jaded consumers.
The shares slumped by almost a fifth as boss Andrew Rennie said : “There’s no getting away from the fact that the market has become tougher both for us and our franchisees.”
Group revenue was up 1.4% at £331.5 million in the first half of the year but like for sales were down 0.1% amid “weaker consumer sentiment” with the second quarter seeing a 0.7% dip. Underlying profit before tax fell 15% to £43.7 million in the six months to June.
EBITDA for the year as a whole is expected to be in the in range of £130 million to £140 million, below previous expectations.
Only 11 new stores have been opened so far this year with the total for the year “now expected to be mid-twenties” as franchisees “are taking a more cautious approach to store openings for the time being” in the face of “weaker consumer confidence, increased employment costs and uncertainty ahead of the Autumn Statement.”
EBITDA for the year as a whole is expected to be in the in range of £130 million to £140 million. Domino’s share of the UK pizza takeaway market grew by 560bps to reach 53.7% in the first half of the year.
Rennie said: “Against a more difficult market backdrop, Domino’s is significantly increasing its market share by offering great value, innovative products and even faster delivery times.”
But he added: “There’s no getting away from the fact that the market has become tougher both for us and our franchisees, and that’s meant that the positive performance across the first four months didn’t continue into May and June.
However total orders and like-for-like sales picked up towards the end of July after a softer start due to the tough comparator period with the Men’s Euro 2024 knockout stages.
The company said it is still considering a second brand “within strict financial and strategic guardrails.”
It added that “no opportunities under current consideration would require equity issuance” and that “whilst a second brand remains a core part of the strategy, if no acquisition announced by end of 2025, the board expects to resume share buybacks.”
