Domino's Pizza expects profits at lower end of range following weak international sales

Writer, Stock Market Wire
Tuesday, January 29, 2019 - 07:20

Domino's Pizza said Tuesday it expected annual pre-tax profit at the lower end of expectations as strong performance in the UK was offset by weaker International sales.

The company said it expected full-year underlying profit before tax at the lower end of the range of market expectations, between £93.9m and £98.2m.

Previous guidance in October had suggested profits would land in the middle of the range of between £93m and £99.6m.

For the three months to 30 December, reported group system sales rose 5.5% to £339.5m as the the pizza delivery giant sold a record number of pizzas over the festive period.

Domino’s core UK and Ireland market saw sales rise 6.2% to £312.9m.

International sales fell 2% to £26.6m, which was blamed on 'growing pains' during the year, particularly in Norway.

Revenues in Norway fell 6.4% on a like-for-like basis weighed down by the continued impact of 'unseasonably warm and dry weather, and delivery area reduction as we converted Dolly Dimple's stores,' the company said.

In Iceland sales were up 1.5% year-on-year, while in Sweden, constant currency system sales were up 34.7%.

Looking ahead, the company said it expected profits to take hit from investments in central functions and infrastructure, which were needed to support its growing businesses.

'I'm pleased with the continued strong performance in the UK and Ireland, where we opened a further 59 stores. Many families decided to kick off the festive season with a Domino's, with the Friday before Christmas breaking all records as we sold more than 535,000 pizzas - equivalent to 12 every second,' said David Wild, Chief Executive Officer.

'The UK delivered food market is vibrant and we estimate that it will grow at a compound rate of 8% a year to 2022.'

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