5th Aug 2025 10:18
(Alliance News) - Domino's Pizza Group PLC on Tuesday lowered its annual outlook with "weak" consumer confidence keeping a lid on sakes growth.
Shares in the firm fell 13% to 213.40 pence each in London on Tuesday morning, the worst FTSE 250 performer.
The company, which is the master franchise holder in the UK and Ireland for pizza delivery firm Domino's Pizza Inc, also added that it is still looking into opportunities to acquire a second brand.
"We continue to explore second brand options, where we can leverage the scale and unique capabilities of the group and deliver attractive returns to shareholders," it said.
"The board is rigorous in applying guardrails to potential opportunities. Any acquisition would need to have a significant growth runway, synergies with DPG's assets, the potential to be a strong national brand and be profitable. Above all, a potential opportunity must be earnings accretive to DPG and the board applies strict internal hurdle rates."
It said "no opportunities under current consideration would require equity issuance". If no acquisition is announced by the end of the year, it plans to resume buybacks.
In the six months to June 29, the Milton Keynes, England-based firm achieved pretax profit of GBP40.5 million, a 32% decline from GBP59.4 million a year prior. Revenue inched up 1.4% to GBP331.5 million from GBP326.8 million.
It lifted its interim dividend by 2.9% to 3.6p per share from 3.5p.
Underlying earnings before interest, tax, depreciation, and amortisation fell 7.4% on-year to GBP63.9 million.
For the full-year, it now expects an underlying Ebitda in the range of GBP130 million to GBP140 million. That would be just below the average market expectation of GBP146.1 million. It had previously expected an annual outcome in line with the market view.
Domino's Pizza Group said like-for-like sales improved towards the end of July, but "consumer confidence remains weak impacting sales growth". It also noted an increase in costs in the wake of the autumn statement, which saw the UK government hike employers' national insurance contributions.
Chief Executive Officer 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."
CEO Rennie in April told The Times in an interview that he is "looking closely at a deal for a second brand".
Bloomberg in December reported DPG had been among several bidders for Lemon Pepper Holdings, the master UK and Ireland franchisee for fried chicken chain Wingstop. Sixth Street became the majority owner, however.
By Eric Cunha, Alliance News news editor
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