Tougher month hits Domino's shares
Published 15/02/2011 | 11:53
Pizza delivery firm Domino's served up a 27pc rise in annual profits today but revealed its record of double-digit sales growth came to a halt in January.
The group reported a slowdown in sales growth since the start of its new year, with like-for-like sales up 4.7pc in the first seven weeks.
This marks a sharp drop on the rate of 10.3pc seen in the previous quarter when the snow and hit TV shows such as The X Factor and Strictly Come Dancing kept customers at home.
Its recent sales slowdown was met with disappointment in the City after the 11pc rise seen in the same period a year earlier.
Shares dropped more than 6pc despite underlying pre-tax profits rising to £38m in the year to December 26, up from £29.9m.
Hugh-Guy Lorriman, an analyst at Seymour Pierce, said Domino's had continued to produce "stellar" results.
However, he added: "After reporting double digit like-for-likes in the first six weeks over the last two years, the market may feel less positive, especially after recent positive trading newsflow from casual dining operators."
Domino's said the current sales performance came against a "backdrop of exceptional comparatives from the same period in 2010 and the current difficult economic climate".
It confirmed aims to meet a ramped-up store opening programme of 60 new outlets a year and said its recent deal with Moto motorway services in the UK would deliver benefits this year.