Fast food icon Domino’s Pizza Enterprises has boosted its global food sales by a massive $151.3m to $1.58bn. The impressive Domino’s results were unveiled at the company’s half year 2020 presentation, which also revealed the brand is on track to crack $3bn in global sales this financial year.
The steady results across all formats saw Domino’s achieve a $15.9m rise in net profit to $69.2m, leading to an increased interim dividend for existing shareholders.
Don Meij, Domino’s Pizza Enterprises group CEO and managing director said the strong showing was further validation the company’s global initiatives were paying off.
“We closed the last decade with more than 780 stores and $700m in total network sales. We ended this decade with almost 2600 stores, $3bn in sales this year, and confidence the strategy that has delivered this performance will allow us to more than double our store count and network sales in the next decade,” he said.
“This half particularly reinforced to us the importance of value to today’s consumer – high quality food, at an affordable price, served quickly and safely. Where we have delivered on this expectation, we have seen strong, profitable growth for our franchisees and business.”
Global sales results
Headlining the 10.6 per cent rise in global sales was a significant increase in online and delivery sales. Over the half, Domino’s reported an 18.8 per cent lift in online sales to $1.1bn, driven by both the company’s internal delivery capabilities and partnerships with third party aggregators, an avenue Domino’s will look to explore further in 2020.
Meij revealed that Domino’s plans on opening seven to nine per cent new stores each year over the next three to five years, working primarily with internal operators.
“The future of our business, and the wider Quick Service Restaurant (QSR) industry, is delivered food ordered online – we have the expertise and are building the store footprint to capture this opportunity,” Meij said.
“Our store growth is coming from internal candidates, exisiting store managers and franchisees, who will expand their businesses with strong like-for-like sales. We believe we can lead the broader QSR industry with same store sales growth of between three per cent and six per cent over the same medium-term horizon.”
Domino’s ANZ results
In the Australian and New Zealand market, Domino’s reported a 3.5 per cent lift in store sales to $613.2m, with six new outlets added to the mix, but it hasn’t been an easy half for the Aussie venture.
Reports of franchisee dissatisfaction and dwindling store profitability threw the chain’s decision to reintroduce the $5 value range into question. However, Nick Knight, Domino’s Australia/New Zealand CEO suggested the return of the value range was the driving force behind the increase in sales.
“We shared last year our Same Store Sales growth was affected by incremental increases to our value range, that did not resonate with high-frequency, carry-out customers,” he said.
“We have listened to our customers and returned our value range to $5 nationally from mid-December, which has brought these customers back to our stores.”
Knight went on to confirm that Domino’s will continue increasing its corporate-owned and refranchised store footprint across Australia.
“The stores we are now operating are seeing improved sales and profitability growth, and we expect this to continue when high-quality franchisees are operating these businesses,” he said.
“Ongoing sales growth will determine the pace of refranchising these stores, and we anticipate it may take 18-24 months to return to a historic level of corporate store ownership.”
On an international front, it’s been a half of strong expansion for Domino’s, with development across Europe and Japan headlining major growth results. Domino’s reported a record 85 new store openings across the group, with Japan proving the most valuable addition, registering 42 new outlets.
Following a strong showing last year, Domino’s French venture continued its aggressive expansion, with 12 new store openings contributing to the 37 additional restaurants added across Europe over the period.
Domino’s went on to reveal it plans on significantly growing its global footprint over the next six months, with 11 stores already added in the first weeks of H2 2020. The latest openings come after Domino’s Pizza Enterprises celebrated the launch of its 400th store in France and its first in Luxembourg, bringing the total number of outlets to 2607 over nine countries.
Author: Nick Hall