The Domino’s Pizza Enterprises Ltd (ASX: DMP) share price fell 12% on Tuesday after the fast food franchise owner released its 2018 financial report.
For the year to July 1st, Domino’s reported a 7.5% jump in revenue to $1.54 billion and a net profit result of $121 million, up 18%. Domino’s CEO, Don Meij, was upbeat.
“We delivered positive growth in all markets but after consecutive years of significant and compounding growth, our bar for success is even higher,” Meij said.
“Less than four years ago we surpassed $1 billion in sales, and this year Group Network Sales reached $2.59 billion – this continues to be a fast growth business.”
Domino’s shareholders can expect a final dividend of 49.7 cents per share (75% franked), taking the full-year dividends to $1.07 per share.
Analysts surveyed by Bloomberg had been expecting Domino’s to report a profit of $130 million and full-year dividends of $1.12 per share. Therefore, it appears the Domino’s result was slightly under analysts’ expectations.
Nonetheless, the company reported positive sales in all markets, it said.
In recent times, Mr Meij, Domino’s and the broader franchise industry had come under scrutiny following claims of underpayment of staff. Mr Meij said Domino’s has transitioned to a new industry award.
“Even with some uncertainty prior to moving to the Award, that affected store performance and operations, our franchisees (sic) profitability is in line with the previous year,” Meij added.
In 2019, Domino’s expects to add 225 new stores and achieve same-store sales growth of 3% to 6%. That will flow through to an operating profit result of between $227 million and $247 million, the company said.
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