Big FY17 profits projected for Domino’s
An example of Domino's new Australian menu
Domino’s has lifted its earnings forecast for the 2017 financial year.
In releasing its 2017 half yearly financial results, the pizza chain increased its projected net profit after taxes for the year to AUD $59.7 million. If achieved, this would be a 33.6 per cent increase on 2016’s results.
Domino’s attributed the profit to its new extended menu and its use of improved technology.
The chain further attributed its success to its “focus on customers, through high-quality meals, market-leading customer service and continuous technology enhancements and innovation” which it said has seen results “significantly surpass expectations”.
Australia and New Zealand results
Domino’s Australia and New Zealand stores achieved earnings before interest, tax, depreciation and amortisation (EBITDA) of AUD $55.2 million, a 23.9 per cent increase on 2016 half yearly financial results.
Group Chief Executive Officer and Managing Director, Don Meji, said customers have supported Domino’s most significant menu upgrade in eight years.
“The Taste the Colour launch in September powered the highest Same Store Sales growth in the Company’s history in October,” he said.
Meij addresses accusations of employee exploitation by franchisees
Meij used the release of the financial results to further address the allegations made over the previous weekend that some Domino’s franchise owners are underpaying their staff.
He said Domino’s has zero tolerance for unethical behaviour in its business.
“We work collaboratively with the Fair Work ombudsman, and our compliance program has been independently audited by Ernst & Young and, as a result, we are confident that our compliance program is industry-leading,” Meij said.
Domino’s Europe delivered a EBITDA growth on 2016’s half year results of 99.7 per cent, reaching AUD $29.9 million.
Domino’s Europe now has more stores than Australia and New Zealand after successfully converting all of its acquired Pizza Sprint stores into Domino’s stores.
Online sales are increasing the number of orders with Netherlands/Belgium digital sales increasing by 38 per cent across the first half of Domino’s 2017 financial year.
“The next six months is expected to be just as strong for Europe, with a record number of organic store openings,” said Meij.
He said all European Domino’s stores will be introducing new technology within the next four weeks that will enhance efficiencies across its network.
Japan store sales continued to grow, increasing 10.9 per cent on 2016 half yearly financial results. Domino’s Japan EBITDA for the first half of the 2017 financial year also increased by 13.2 per cent.
Same Store Sales did however fall by 4.7 per cent which Domino’s said was expected and that things have since already started to turnaround.
Meij again attributed its menu offerings to Domino’s profit success with ‘Quattro Classics’ and ‘Chef’s Quattro’ increasing consumer testing.
“The new items are important additions to our menu and are currently setting us apart from competitors in the market,” he stated.
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