Domino’s Pizza misses profit guidance

Fast food retailer, Domino’s Pizza, has missed full-year profit expectations due to weak sales in Japan and France. The pizza giant, however, posted a lift in full year net profit by 24.8 per cent to $102.9 million, helped by double-digit sales growth in Australia, New Zealand and Europe.

CEO, Don Meij, said the forecast miss was mostly caused by underperformance in France.

“I acknowledge our results, while strong, did not reach the guidance we set. This was largely due to the delay in rectifying some issues with our online platform in France, and the initial response in H2 to our value range offering in France,” Meij said.

“Both have now been addressed.”

Domino’s, which lifted its full-year earnings forecast in February after a strong first-half performance, had anticipated net profit and underlying earnings would rise 32.5 per cent.

The company said underlying net profit for the 12 months to July 2 grew 28.8 per cent to $118.5 million, while earnings before interest, tax, depreciation and amortisation rose 28.3 per cent on the prior year to $230.9 million.

Revenue for the year to July 2 has risen 15.4 per cent to $1.07 billion.

Domino’s said FY18 had started well, but indicated that same stores sales in the Australian and New Zealand market would likely be lower in the first half.

The group plans to open between 180 and 200 new stores and expects net profit to increase by around 20 per cent in FY18.

It also has announced a share buyback of up to $300 million, which will be funded through new and existing debt facilities.

The company will pay a partially-franked final dividend of 44.9 cents per share, taking the full-year payout to 93.3 cents per share, up from the 73.5 cents for the 2016 financial year.