Domino’s Pizza (DMP) has upgraded its full year profit and sales guidance less than a month after revealing its expansion in France.
Shareholders at the annual meeting in Brisbane yesterday heard the upgrade followed strong sales in Australia, New Zealand and Europe in the first few months of 2016, but weak growth in Japan.
Domino’s CEO, Don Meij told the meeting that underlying net profit and earnings before interest, tax, depreciation and amortisation were now expected to rise 25% in the year to June 2016, underpinned by same-store sales growth of 10.5% and currency gains.
That is up from the 20% profit growth guidance issued in August at the time of the annual results, but well below the 40% growth achieved in 2014-15.
“While we remain cautious with eight months of trading ahead, we are confident about continuing the same strong momentum and as such, have upgraded guidance to reflect this,” Mr Meij said.
"We have already recorded impressive same-store sales in Australia, New Zealand and Europe for the first 18 weeks of 2016 and Japan is trading in line with management expectations," Mr Meij said.
The upgrade came late in the day and the shares didn’t have much time to react and closed down half a per cent ay $47.65.
DMP 5Y –
Domino’s said same-store sales had risen 13.9% in Australia and New Zealand in the first 18 weeks of 2016, ahead of the 11.3% growth last year, and forecast same-store sales growth of 9% to 11% for the year compared with previous guidance of 6% to 8%.
Same-store sales had risen 7.7% in Europe over the last 18 weeks, compared with 6.4% last year, and hopes for full year sales growing 6% to 8%, up from original guidance of 4% to 6%.
But Japan was the odd one out where same-store sales growth slowed to 0.7% in the first 18 weeks, down from 1.8% in 2014-155. Domino’s guidance for Japan was unchanged at 1% to 2% for the full year.
“The strong positive momentum we are experiencing in Australia and New Zealand is largely attributed to the implementation of the GPS Driver Tracker technology over the past couple of months which allows customers to track their order from the store to the door,” Mr Meij told the meeting.
Last month the expanded in Europe by buying Pizza Sprint, a chain based in western France (with 89 stores) for 31.5 million euros or $50 million.
