Domino’s Pizza cuts full-year core profit guidance

Domino’s Pizza cut its guidance for full-year core profit on Tuesday as it pointed to a tougher operating environment and weaker consumer confidence.

In the 26 weeks to 29 June, underlying pre-tax profit declined 14.8% to £43.7m, while underlying earnings before interest, tax, depreciation and amortisation fell 74% to £63.9m.

Group revenue ticked up 1.4% from the same period a year earlier to £331.5m, while system sales were 1.3% higher at £777.8m.

The interim dividend per share was lifted 2.9% to 3.6p.

Domino’s said store openings were lower than expected, with franchisees cautious given increased employment costs.

The group said total orders and like-for-like sales improved towards the end of July after a softer start due to the tough comparator period with the Men's Euro 2024 knockout stages.

However, it also said that consumer confidence remains weak, and with employment costs increasing and the uncertainty ahead of the Autumn Statement, it now expects FY25 underlying EBITDA of between £130m and £140m.

Previously, Domino’s had expected to meet market expectations of £140.8m to £149.2m.

Chief executive Andrew Rennie said: "Against a more difficult market backdrop, Domino's is significantly increasing its market share by offering great value, innovative products and even faster delivery times. This is a result of a relentless focus from our colleagues and franchise partners, and I'd like to thank them all for their hard work.

"There's no getting away from the fact that the market has become tougher both for us and our franchisees, and that's meant that the positive performance across the first four months didn't continue into May and June.

"Given weaker consumer confidence, increased employment costs and uncertainty ahead of the Autumn Statement, franchisees are taking a more cautious approach to store openings for the time being.

"Despite these near-term challenges we remain confident in our strategy and the prospects for our resilient, market-leading business. That confidence is demonstrated by our decision to increase the interim dividend, and we also continue to assess a range of accretive growth opportunities."