Uncertainty seems to be the theme today at Domino’s but there are green shoots of progress in expansion, a rising dividend and trade momentum building.
Underlying earnings are bang in the middle of the expected range if a touch short of analyst expectations but profits are way off, albeit on a favourable comparison last year.
Domino’s desperately needs to get through to value-conscious consumers battling inflation if it’s to get back to winning ways.
UK consumer confidence levels are in their boots and, with inflation likely to tick higher into the summer, it might mean more pain for the likes of Domino’s before an inflationary reprieve later in the year.
There’s also the cost of upcoming tax changes to deal with, something the continued store rollout will have to mitigate.
The Domino’s discount doesn’t just come through the letterbox. UK shares are now much cheaper than DOM’s US sibling, as one of the most shorted stocks on the UK market. To get back into the market’s good books, profits really need to start motoring under the new five-year framework. If they don’t, investors are likely to pile even more pressure on the pizza brand.
When investing, your capital is at risk. The value of your investments, and the income you receive from them, can go down as well as up and you may get back less than you invest. Forecasts aren’t a reliable guide to future results or returns.
This information is for educational purposes only. It is not an offer, recommendation, inducement or invitation to buy, sell or hold any securities or options, or to engage in any investment activity or strategy.
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