Shares in Domino’s Pizza (LSE: DOM) fell more than 44p in early trade, as the company released its pre-close trading statement for the second quarter.
Like-for-like sales slipped marginally in the UK, a 6.1% increase following last year’s comparable 8.1% rise. However, system sales roles 11.7% to £147.6m, against £132.3m in FY2012.
The pizza company revealed that ecommerce — online and mobile — sales now account for 63.3% of first-half deliveries in the UK, compared to 52.4% in FY2012, with further rises expected with a new version of its website due in the second half of the year.
Internationally, system sales rose in the Republic of Ireland and Switzerland by 5.1% and 6.2% respectively. But it’s the German sector that disappointed the market this morning — losses are anticipated to be £2m-£3m more than previously expected, due to Domino’s corporate stores significantly lagging the performance of its franchise stores in the country.
As a result, the company plans to transition the majority of its corporate stores across to franchisee management as soon as possible, which will incur additional one-off costs. Chief executive officer Lance Batchelor commented:
“Corporate stores have allowed us to test menus, develop marketing plans and understand the German consumer – but now that the ground work is done, it is time to drive our German expansion using our tried and tested franchise model.
“We know the best way to get great results from stores is to put them in the hands of franchisees – and with five world-class franchisees now operating stores in the German market and more arriving shortly, we are excited about the future in this fledgling territory.”
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> Sam does not own shares in Domino’s Pizza.
