- Positive trends continued into Q1
- Good start to Q2
- Full year profit to meet expectations
Domino’s Pizza (DOM) said positive trends seen in late 2024 have continued with system sales up 2.1% and like-for-like sales up 0.5% in the first three months of 2025.
While encouraging, the quarterly growth trends are slightly below what the company reported for the first 10-weeks of the year, which may explain why the shares fell 2.5% to 270.7p in early dealings.
Shore Capital notes the timing of Easter and dry weather in March may have had an impact.
Over the last year the shares are down 17% compared with a 2% drop in the mid-cap FTSE 250 index.
WHAT DID THE COMPANY SAY?
CEO Andrew Rennie commented: ‘During Q1 Domino’s market share has strengthened, our franchise partners have driven further improvements in delivery times, and we continue to focus on giving our customers compelling value.
‘Our initial assessment of newly introduced tariffs shows minimal direct impact. We continue to assess any indirect impacts on our supply chain, monitor the broader environment going forward and our full year expectations remain unchanged.’
Following positive results from the first phase of the customer loyalty trial, Domino’s has moved onto the second phase and intends to target a full rollout in 2026.
GUIDANCE MAINTAINED
Despite macroeconomic uncertainties Domino’s continues to believe it can deliver full year profit in line with market expectations.
Company-compiled analyst forecasts for underlying EBITDA (earnings before interest, tax, depreciation, and amortisation) range from £140.8 million to £149.7 million, with a mean expectation of £147.4 million.
Analysts at Shore Capital, whose underlying EBITDA forecasts are towards the top end of the consensus range, expect Domino’s to remain cash generative with excess cash likely to be used for shareholder returns, subject to net debt to EBITDA remaining within the 1.5 times to 2.5 times range.
‘We see an opportunity to drive customer frequency, supported by the development around loyalty, which we estimate could add at least £20 million to adjusted EBITDA,’ the analysts said.
