Domino’s Pizza says it’s on track to deliver a 20% lift in full year profit despite softer than expected sales in Australia as it continues to cut delivery times and introduce new toppings, including avocado.
The company today announced a 17% lift in half year profit to $58.7 million.
Revenue rose 5% to $567.6 million for the six months to December. Network sales increased 7.1% to $1.25 billion, up 4% on same store sales.
The company also revealed a $4.1 million cost related to a nationwide industrial relations audit process. The company, hit by a scandal over wage underpayment, has launched a wage audit across its stores and franchisees.
“Our goal is to give existing and new customers more of what they want; menu options, cooking times and a simplified ordering experience that exceeds expectations and the response from our customers demonstrates the importance of this approach,” says CEO and managing director Don Meij.
The company announced an interim dividend of 58.1 cents, 40% franked, a rise of 20%.
In Australia and New Zealand, sales increased 7.1% or $36.8 million to $557.8 million for the six months.
Domino’s ANZ CEO Nick Knight says the 799 stores in the region had strong sales but growth was lower than expected in the first half because of the significant growth recorded in the same six months in 2017.
“The result was slightly softer than we anticipated, but we remain committed to exceeding our customers’ expectations with a menu and customer experience that listens to, and exceeds, our customers’ cravings,” he says.
“Adding avocado, Extreme Desserts, and our very first Dessert Pizza, typified this approach, and we rounded out H1 by adding our 16 (inch) New Yorker range, that met a previously unsatisfied demand.”
Knight says there’s a positive sales momentum leading into second half.
Domino’s reaffirmed profit growth guidance of 20% with improvements to same store sales in all markets.
The company updated same store sales guidance for Australia and New Zealand to between 6% and 8%, down from 7% to 9%.
The store count target is 4,650 stores by 2025. This number includes 1,200 stores in ANZ, 2,600 throughout Europe and 850 stores in Japan. It currently has 2,193.