Domino’s Pizza serves a slice of profit cheer

Domino's said popularity of its app helped online orders rise 35 per cent. Picture: Jane Barlow
Domino's said popularity of its app helped online orders rise 35 per cent. Picture: Jane Barlow
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Domino’s Pizza said yesterday that strong online sales and surging demand for takeaways in the wet summer weather would see it deliver better-than-expected annual results.

The group, which has more than 800 stores in Britain, said UK like-for-like sales jumped 14.9 per cent in the 13 weeks to 27 September compared with a year earlier.

It said growing popularity of its app helped online orders rise 35 per cent, adding that 75 per cent of all orders have come through its online channels in the year to date.

The pizza delivery firm, which is listed on the London Stock Exchange, also said it was helped by relatively poor weather during the summer months.

It added that given its strong third-quarter trading and a solid start to the fourth quarter, it expected full-year results to be ahead of forecasts.

The bullish update sent Domino’s shares to an all-time high. They closed at 1,002p, up 12.6 per cent.

Chief executive David Wild said: “We are delighted by this performance as our UK business goes from strength to strength, reflecting the success of our strategic and marketing initiatives. It represents the eighth consecutive quarter of double digit like-for-like sales growth.”

He added: “We enter the final quarter of the year with good momentum, are confident of beating our previous expectations for the full year.”

Domino’s opened 12 UK stores in its third quarter, bringing the number of stores opened this year to 33. It added it was on course to open 50 UK shops this year.

The group said in Ireland it was also seeing online orders increase adding it was enjoying the benefit of the country’s continued economic recovery.

Domino’s also has smaller operations in Switzerland and Germany, which have performed poorly in the past.

It said it was working to improve the performance of these stores, but added there remains to lot of work to do.

Analysts at brokerage Numis Securities upgraded their full-year profit forecast for Domino’s to £68 million.

The stock has risen by about a quarter this year, valuing the business, which competes with the likes of Pizza Hut and Papa John’s, at some £1.5 billion.

In its update, Domino’s told investors: “During the third quarter where our offline media spend has traditionally been low, we also benefited from our ongoing sponsorship of Hollyoaks which enhanced brand saliency and drove revenues.

“Sales were also helped by relatively poor weather during the summer months.”