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- Australia’s largest pizza chain Domino’s Pizza (DMP) shares have fallen today as the company sees a 5.3 per cent drop in profit to $91.3 million
- The pizza chain says that food inflation is on the rise and same-store growth is likely to be lower this year than the group first predicted
- Domino’s said it will stay clear of bumping up the prices of its pizza range but will come out with a new range of higher-price premium products
- However, Dominos did see an increase in global food sales to $2.05 billion, an 11 per cent increase, and added 285 stores and is on track for a 500 store expansion this financial year
- On the market, Domino’s was down 13.5 per cent and is trading at $86.96 per cent
Domino’s Pizza (DMP) shares have taken a fall as it reported a slight drop in profit in its financial results for the six months ending December 2021.
The pizza company saw a 5.3 per cent drop in profit to $91.3 million for the half-year and earnings before interest and tax was $144.7 million, a 5.7 per cent fall from this time last year.
Domino’s says that food inflation is on the rise and same-store growth is likely to be lower this year than the group’s forecast.
The franchise said it will stay clear from bumping up the price on its core range of pizzas but will instead bring out a new range of higher-price premium products to offset the higher costs of ingredients such as cheese and meat.
“While there may be uncertainty about what it means for society to be ‘living with COVID’, we are certain we have the essential ingredients for long-term future success, and plan to deliver significant continued growth,” CEO and Managing Director Don Meij said.
“COVID-19 has brought unanticipated challenges, including the closure of a market, temporary store closures, and staff shortages as they self-isolate as patients or close contacts.”
However, Dominos did see an increase in global food sales to $2.05 billion, an 11 per cent increase.
In the first half, the company and its franchisees added 285 stores and are on track for a 500 store expansion this financial year.
In Asia, Dominos added 87 organic stores, including five in Taiwan, while the chain expanded in Europe by 39 stores and Australia/New Zealand adding three new stores.
Just two years after Dominos served $3 billion in global food sales, including $2 billion online, the company expects to reach $4 billion this year in global food sales, with more than $3 billion online.
“It remains our intention to deliver another strong year of profit – a result of our long-term investments that accelerated during COVID-19,” Mr Meij told the market.
“Our growth has come from those franchisees and store managers who understand the importance of fortressing their markets, and their businesses – managers have chosen to become franchisees, and franchisees have expanded by opening new stores or purchasing corporate stores.”
Domino’s has also agreed to pay its shareholders an interim dividend of 88.4 cents per share.
On the market, Domino’s was down 13.5 per cent and is trading at $86.69 per cent at 3:00 pm AEDT.
