Couch potatoes tucked into takeaways with a passion in the run-up to Christmas, helping Domino’s Pizza to beat market forecasts for the full year.
The group has reported underlying like-for-like sales growth of 6.1 per cent in the fourth quarter, having sold 28 million pizzas, or more than 300,000 a day — the biggest seller being the Pepperoni Passion. The results were well-received and the shares closed 1.7 per cent higher at 356.60p this afternoon.
Domino’s Pizza Group, which opened its first UK store in Luton in 1985, now has 1,045 stores in the UK plus 49 in Ireland. After a stuttering, and costly, move into Germany, where it was forced to bring in a partner, it has returned to international expansion, with a presence in Switzerland, Iceland, Norway and Sweden.
Steve Clayton, manager of the Hargreaves Lansdown Select UK fund range, said: “Domino’s is trading well, right across its estate, with positive like-for-likes everywhere from Iceland to Switzerland and especially back home in the UK. Profit for 2017 is now expected to be a little ahead of the market’s range, suggesting something of the order of £92 million is likely.
In the 13 weeks to Christmas Eve total sales across its franchise network, including stores overseas, jumped by 10.1 per cent to £321 million on an organic basis, above consensus forecasts for growth of 9.3 per cent.
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The group said that it had been helped by an extra day, although analysts put the performance down to strong promotions and marketing campaigns.
Its biggest day of sales was the day of the X Factor final on December 2, sponsored by the rival takeaway group Just Eat, when its takings were up 25 per cent on the average Saturday during the year.
The like-for-like growth of 6.1 per cent, which came on the back of strong order growth, excluded stores in franchise areas that had been subdivided into smaller territories. Online sales were up 14.5 per cent, accounting for 77 per cent of overall sales.
The group opened 37 stores in the UK during the final quarter, taking the total for the year as a whole to a record 95 and creating 3,300 jobs.
The outcome represents a bounceback from a below-par first half, which the company had blamed on “a more uncertain UK economic environment”. UK like-for-like sales for the full year, excluding splits, were up by a more modest 4.8 per cent. Total system sales were up 8.9 per cent on an organic basis.
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The group said that after the strong fourth quarter it expected pre-tax profits for the year to be “slightly above the current range of market expectations”. It brought down its full-year capital expenditure forecast from a range of £50 million to £60 million to between £45 million and £50 million.
David Wild, the Domino’s chief executive, hailed “another year of significant progress”, adding: “With a record year for new store openings and continued like-for-like sales increases, the UK business has demonstrated its resilience in a challenging economic and competitive environment.