Investors are celebrating an eight consecutive quarter of double-digit sales growth at pizza delivery firm Domino’s Pizza (DOM), with shares surging 11% to 991p this morning.
The £1.5 billion cap’s UK like-for-like sales are up by an impressive 20.7% to £200 million in the third quarter to 27 September, helped by relatively poor weather in the summer, its sponsorship of TV show Hollyoaks and its continued investment in technology.
Revenue through digital channels is 35% ahead of last year and more than 75% of delivered sales in the year-to-date have been online, with more than half placed through its mobile app.
Like-for-like sales in Germany and Switzerland, territories where Domino’s has struggled to get a foothold, are up by an encouraging 19.3% and 10.9% respectively, but the group says there is still lots to do to improve their overall performance.
‘We enter the final quarter of the year with good momentum, are confident of beating our previous expectations for the full year and remain excited about our longer term growth prospects,’ says Domino’s chief executive David Wild.
N+1 Singer has upgraded its recommendation from ‘hold’ to ‘buy’ and says it’s likely to increase its full year pre-tax profit forecast from £67 million to £69 million, 26% higher than 2014’s pre-tax profit of £54.8 million.
Domino’s shares have risen by 77% in the past 12 months and we expect further gains at its fourth quarter update, when it will see the full benefits of the Rugby World Cup.