Pizza delivery outfit Domino’s Pizza Group PLC (LON:DOM) said it had made an encouraging start to the year.
In the UK and the Republic of Ireland, system sales were up 10.4% year-on-year in the first quarter.
READ: Domino’s Pizza Group shares rise as like-for-like sales pick up
Like-for-like (LFL) sales growth, excluding stores in split territories, was 7.0%, driven by strong like-for-like order growth of 6.7%; this represents a slight slowdown in LFL sales growth of 7.1% for the first eight weeks of the year, which was the period before the “Beast from the East” hit the British Isles.
The group said the negative impact of the severe weather experienced in March was offset by a strong New Year performance and the timing of Easter.
Switzerland achieved like-for-like growth of 12.0% driven by successful promotions and strong online momentum.
In Iceland, constant currency system sales were up 5.5%, with like-for-like growth of 2.0%.
In Norway, the conversion of Dolly Dimple's stores continues and at the period end, the group was trading from 33 Domino's-branded outlets. Pro forma like-for-like sales growth of 10.3% demonstrated, according to Domino’s, the strong response to the brand in the market.
i may not be perfect but at least i dont put pineapple on my pizza
— im not even bald anymore (@baldboyblues) April 26, 2018
"The year has started well, with continued good growth in all of our markets,” declared David Wild, the chief executive officer of Domino’s.
“In the UK, customers are responding very positively to our clearer value proposition, with strong scores for value for money and overall satisfaction. We have also made excellent operational progress, with the rapid roll-out of GPS continuing. I am encouraged by our international operations, which are gaining scale," he added.
Russ Mould at AJ Bell said the first quarter results were almost guaranteed to be good given the prolonged spells of bad weather and the timing of Easter.
“The news has helped to lift the shares to a 12-month high; however, we’re only talking about three months’ trading, which is not enough to silence the ever-increasing numbers of critics of the business.
“The central thesis for critics is based on the fear that franchisees have been under a lot of pressure from rising food and labour costs, as well as cannibalisation as franchise territories are split.
“Troubled franchisees may prefer to get into a better financial state rather than continue aggressive expansion, which could have a negative knock-on effect for the parent company should its royalty and supplies income growth slow down,” Mould said.
Shares in Domino’s were up 2.9% at 356p.