Domino's expects lower first-half earnings due to lockdown-related costs
They were unable to provide full-year guidance, citing uncertainty.
Domino’s expects its first-half core earnings to be slightly lower, citing additional costs during the coronavirus-led lockdown.
In an update, Britain’s largest pizza delivery company said the costs stemmed from rationalising their menu offering, re-routing store dispatches to stop two-person deliveries, ensuring all stores remain closed during restocking, contact-free delivery boxes and issuance of face masks.
“At this time, we cannot be certain how long the changes we have made to our operations, and the associated costs will continue, as this will be determined by the wider Covid-19 backdrop. These unprecedented times also continue to provide an uncertain trading backdrop. As such, we remain unable to provide guidance for the full year,” it said.
Domino’s also observed a change in consumer purchasing behaviour and average basket composition, with a higher proportion of sides and desserts which aided in sales performance but impacted margins.
Like-for-like sales in their UK business grew 3.7% for the first half of the year to 14 June 14. Sales at its smaller Ireland business fell 5.9%, attributing it to a more pronounced weaker consumer spending during the lockdown.
