The share price of Domino’s Pizza Enterprises Ltd (ASX: DMP) is down 12% after releasing its 2018 financial results to the market today, despite revealing an 18.1% increase of net profit.
Domino’s is a large franchisor of pizza outlets in Australia, New Zealand, France, Germany, the Netherlands and Belgium.
Here are some of the highlights from its report:
- Revenue up by 7.5% to $1.15 billion
- Network sales up by 11.7% to $2.59 billion
- EBITDA grew by 12.3% to $259.2 million (click here to learn what EBITDA means)
- Reported net profit grew by 18.1% to $121.5 million
- Total dividends increased by 15.5% to $1.078
According to Bloomberg, analysts were expecting Domino’s to report a profit of $130.7 million. A dividend of $1.12 was also expected. With the result below estimates, investors appear to have been disappointed by the company’s performance.
Investors may also be disappointed that Domino’s did not meet its own guidance.
The company previously guided for same-store sales (SSS) growth of 6% to 8% this year but grew it by 4.5%. European SSS guidance was for 6% to 8% growth, which came in at 5.7%.
Domino’s had also guided for underlying net profit growth of around 20%, but the underlying net profit growth was 15%.
Group CEO and Managing Director Don Meij remained positive saying: “We delivered positive growth in all markets but after consecutive years of significant and compounding growth, our bar for success is even higher.”
Outlook
In FY19 the company is guiding same store sales growth of 3% to 6% and adding an additional 225 to 250 new stores to its total network.
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