Domino’s Pizza saw its stock dip by 2.3% after the company released its first-quarter trading update, revealing a slower-than-expected pace in new store openings.
The pizza giant reported system sales of £393.3 million, with like-for-like (LFL) sales excluding splits rising by just 0.5%. While system sales increased by 2.1% and total orders grew by 0.5%, the stock still experienced a decline, reflecting investor concerns about the company’s performance.
In the first quarter, Domino’s opened only four new stores, falling short of some analysts’ expectations. The company noted that 26 additional locations are either under construction or awaiting planning approval. Despite the slower store expansion, Domino’s highlighted that the overall business environment has become more uncertain since its last full-year results. However, the company downplayed any significant direct impact from tariffs.
On a more positive note, Domino’s reported progress on its loyalty scheme, which is expected to be fully rolled out by the end of fiscal year 2026. The company also noted that both current orders and LFL sales remain positive at the start of the second quarter.
Looking ahead, Domino’s affirmed its full-year underlying EBITDA guidance of around £147.4 million, in line with market expectations.
Despite the upbeat outlook, the slow pace of new store openings in Q1 raised concerns about the company’s ability to meet its target of opening “in excess of 50” stores by the end of the year. However, RBC analysts believe the target remains achievable, as new store openings tend to be concentrated in the second half of the year.
RBC commented on the update, stating, “While the group’s full-year guidance is reassuring, the slow new store opening pace in Q1 presents a risk to the ‘in excess of 50’ target. However, with the majority of openings typically happening in the second half, there is still ample time to achieve the goal.”
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