Domino’s Pizza Enterprises (DMP) shares rallied sharply yesterday in the day’s big FBI inspired boost to Hillary Clinton’s bid for the US Presidency, rising as much as 7% after the company increased its full financial year forecast for pre-tax profit growth to 30%, up from 25%.
That was after reporting same-store sales rose a solid 17.7% in the first 16 weeks of the financial year.
The shares closed 2.9% higher at $68.22.
CEO Don Meij told shareholders at the group’s annual general meeting in Brisbane that sales were higher than expected in the opening months of the June 30 year.
Same store sales in the Australia and New Zealand region expected to be up an 12%-14% over the prior year in 2016-17.
He told the meeting the growth was due to the group’s recently launched new menu that includes more premium meat and more side dishes and desserts.
In August Domino’s declared a record profit and announced plans to open up to nearly 200 new stores over the next year.
“About two thirds of our growth is coming outside of pizza, from various different places, it is coming from other (fast-food) categories, coming from other players,’’ Mr Meij said at the time.
Domino’s Pizza reported a full-year profit of $82.4 million, up 29% increase on the 2014-15 result and a new record result for the chain. The company said then momentum was continuing into the new financial year, with Domino’s making its strongest start to a new year in terms of store openings and group same store sales.
“We are very pleased with the sales performance, even higher than expected, as a direct result of our Taste the Colour menu launch in Australia and New Zealand,” Mr Meij told yesterday’s meeting
“Our new menu, combined with the ongoing technology improvements we are rolling out to make it easier and more rewarding to order from Domino’s, demonstrate why we have grown our share to 38% of the Quick Service Restaurant Pizza sector,” he said
“In October, our Australian stores delivered the largest like-for-like growth for the country in the Company’s history.”
Mr Meij said for the first 16 weeks of the financial year, the European region reported same store sales increases of 3.77%, while Japan’s same store sales were down 0.6% down on the previous year, in line with expectations.
“The conversion of Joey’s Pizza stores in Germany have exceeded our initial plans and we will now see all stores fully converted by December 8, six months ahead of schedule,” Mr Meij told shareholders.
“The Pizza Sprint stores which have converted have exceeded our expectations with many of these franchisees seeking additional stores, we expect the clear majority of Pizza Sprint stores to be converted by the end of FY17.”
“These results give us confidence to upgrade our guidance for ANZ same store sales, with 12-14% growth expected this year (up from +10-12%) and reaffirm our Europe (+5-7%) and Japan (0-+2%) same store sales guidance.
“In addition to growth in existing stores, we are opening new stores in all regions and expect store openings to be at the higher end of our guidance of between 175 and 195 stores.
“An increasing number of our customers’ orders are being placed through our websites, in all of our regions.
“This financial year we are seeing very strong digital growth, with digital sales growth outpacing offline growth, with year-on-year growth in digital sales of 36.9% in Australia/New Zealand, 38.1% in Europe, and 24% in Japan,” he added.
