Domino’s sees profit at lower end of range, shares down

Domino’s Pizza, said on Tuesday it expects full-year underlying pre tax profit at the lower end of a consensus range, despite selling a record number of pizzas on the Friday before Christmas.

The company’s shares were down 5.4 per cent in early morning trade, taking them to the bottom of London’s midcap index .

Casual dining chains in Britain continue to face higher expenses from a rise in the national living wage and food costs amid a slowdown in consumer spending due to uncertainty about Britain's impending exit from the European Union.

Domino’s Pizza, a franchise of US company Domino’s Pizza Inc, said it plans to invest in other European markets, but added that the move would hit overall profitability in the short term. Sales in its international markets rose 1.6 per cent on a constant currency basis during the fourth quarter.

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In the Republic, system sales improved 10.2 per cent on a constant currency basis.

"Our international businesses offer significant long term potential, but we have experienced growing pains this year, particularly in Norway, where we have faced business integration challenges," chief executive David Wild said.

The company said it expects its international operations, which includes countries such as Germany and Luxembourg, to break even in 2019.

The popularity of the company’s cheeseburger pizza fuelled record sales of more than 535,000 pizzas, which equates to 12 every second, on the Friday before Christmas.

Sales at UK stores open for over a year rose 4.5 per cent during the 13-week period ended December 30th, as cash-conscious diners in the company’s home market are increasingly ordering in through smartphones.

Underlying pre tax profit was previously expected to be between £93.9 million and £98.2 million pounds (€107.8 million to €112.8 million), the company said. It reported underlying pretax profit of £96.2 million in 2017. – Reuters