2nd Oct 2014 07:00
LONDON (Alliance News) - Pizza delivery chain Domino's Pizza Group PLC Thursday said strong sales growth in the third quarter continued to be driven by its UK business, online sales, and its meal-deal promotions, but the chain warned of tougher trading comparatives in the final quarter.
"We face more challenging comparatives for the final quarter, but we remain confident of a satisfactory outcome for the year and are planning to build on this success in 2015," said Chief Executive David Wild in a statement.
Domino's Pizza reported like-for-like UK sales growth of 12.9% in its 13 week third quarter ended September 28. System sales, which are total sales made by all the company's franchisee and corporate stores across the countries in which it operates, rose 17.6% to GBP165.7 million.
The pizza chain said its 'buy one get one free' and pizza combo deals drove sales growth in the UK, especially online, which is said accounted for almost 71% of all UK delivered sales in the period, up from 62.4% last year.
"We are delighted with the like-for-like performance in our core UK business and remain on track for our targeted new store opening programme. We are building on our success on-line with the roll-out of our new website and a series of enhancements to continue to make it easy for our customers to order Domino's," said Wild.
During the quarter its opened 13 new stores in the UK, bringing the year-to-date total to 21. Its target is to open 40 to 50 stores by the end of 2014.
However, Domino's said progress in its German business is slower than it had hoped, but it said the transformation of the German unit continues. In the first half of the year, the group's profit was dragged lower by restructuring costs of its German business, having decided to move it to a franchise-only business after its own stores performed poorly in the country. It also slowed its store opened programme, streamlined support costs, and went for a premium pricing model with aggressive promotions.
It said German system sales totalled EUR2.5 million in the quarter, down 11% from EUR2.8 million a year before, while like-for-like sales in Germany were down 9.9% during the period, compared to 9.4% growth in the year-earlier period.
The pizza chain said Thursday that it has "mothballed" several underperforming stores.
"Progress in Germany is slower than we would have liked, but we are committed to the execution of our strategy. Our performance in Switzerland is encouraging," said Wild.
It said its business in Switzerland has been benefiting from store refurbishments and its store relocation programme. It said its confident of the business moving into profitability during the next quarter.
Domino's said like-for-like sales in the year to date are up 11.8% in the UK, 4.0% in Ireland, 4.3% in Switzerland, and down 4% in Germany.
The company recently resumed its share buyback programme.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
Copyright 2014 Alliance News Limited. All Rights Reserved.
Related Shares:
Dominos