Domino's Pizza First-Half Profit Gains on Weather, World Cup
Domino’s Pizza U.K. & Ireland Plc, the U.K.’s biggest pizza-delivery company, said first-half profit rose 30 percent, helped by World Cup soccer matches and sponsorship of the “Britain’s Got Talent” television show.
Net income increased to 12.06 million pounds ($18 million), or 7.62 pence per share, in the six months ended June 27, from 9.3 million pounds, or 5.93 pence per share, in the year-earlier period, the Milton Keynes, England-based company said today in a statement on the Regulatory News Service.
Domino’s was helped as customers watched World Cup matches at home on television, plus a “Two for Tuesday” advertising campaign that started last August. Second-quarter gains in sales at stores open at least a year of 17 percent were “spectacular,” said Paul Hickman, a KBC Peel Hunt analyst.
“Three factors contributed to this overperformance,” wrote Hickman, who has a “buy” recommendation on the shares. “The continued success of the ‘Two for Tuesday’ promotion, the third year of sponsorship of ‘Britain’s Got Talent,’ and the World Cup.”
Domino’s rose 3 pence to 406 pence at 9:06 a.m. in London. The shares have increased 36 percent so far this year, giving the company a market value of 653 million pounds.
Same-store sales will slow in the second half due to comparisons with last year’s Tuesday promotions, Chief Financial Officer Lee Ginsberg said in a telephone interview.
He said analysts are “penciling in” second-half increases of 4 percent, and “I’m hopeful we can beat that.”
In August, Domino’s will start advertising its lunch menus, plus new oven-baked submarine sandwiches, he said.
In February, Domino’s boosted its store-opening plans to 55 a year from 50, as it seeks to have 1,200 outlets by 2021. In May, it opened a supply depot in Milton Keynes that it says will save 1 million pounds a year in costs.
Internet sales increased 61 percent in the half, to 56.9 million pounds, the company said.