Domino’s Pizza warns over writedowns as it posts sales hike
Irish sales in store were muted but online sales grew 11%
Online sales rose 11 per cent in the Republic for Domino’s. Photograph: Jason Alden/Bloomberg
Domino’s Pizza has served up a sales hike for the last three months of 2019, but warned of writedowns of up to £60 million (€71 million) for the full year.
The London-listed arm of the group said underlying like-for-like sales in the Republic fell 1 per cent compared to growth of 3.9 per cent in the UK over the 13 weeks to December 29th. Online sales rose 11 per cent in the Republic and 8.3 per cent in the UK.
Domino’s said its under-pressure directly owned international business – which is being sold off as it beats a retreat from foreign markets – is expected to tumble to an operating loss of around £20 million in 2019.
Domino’s also revealed full-year results are set to see a hit around £20 million in impairment charges for corporate stores and up to £40 million for its international business.
The group said it is prioritising the sale of its hardest-hit overseas division in Norway, which is suffering “significant” losses, and will look to offload businesses in Sweden, Switzerland and Iceland next.
“We are focused on securing the best possible terms for shareholders and are working closely with Domino’s Pizza Inc throughout,” the group said.
The update showed that international sales fell 1.4 per cent in local currencies over the fourth quarter.
Domino’s gave assurances that the overall business is on track with market expectations for earnings of £103.4 million for 2019.
Chief executive David Wild said: “I am pleased with the performance of our core UK and Ireland markets, with system sales up 4.4 per cent and UK like-for-likes up 3.9 per cent, against a strong comparative and a competitive backdrop.
“This performance was driven by the power of our brand, our strong digital capabilities and the operational expertise of our franchisee partners.”
The disposal of the international business will allow the company to refocus around its UK and Ireland operation, which also faces challenges as a dispute with store operators drags on.
Domino’s said in its update that the row is “ongoing” and warned that it expects a resolution to “take time”.
Mr Wild added that the group is “well advanced” in the hunt for a new chief financial officer after David Bauernfeind tragically died in a snorkelling accident while on holiday with his family in Mauritius. – PA