While the cold weather has been a misery for most of us, it has bought a warm glow to Domino's Pizza (DOM). These conditions, which serve to keep people at home ordering takeaway food, helped contribute to a 12.4 per cent UK like-for-like sales rise over the last six weeks, according to calculations by broker Numis Securities. This is reminiscent of the kind of like-for-likes sales growth Domino's regularly churned out a few years ago.
However, we believe the broader slow down in like-for-like growth over the last few years in the UK is probably more reflective of underlying conditions. And while the group's fledgling German operation is performing very impressively, it remains some way from profitability. Over the last quarter as a whole, which included snow-related disruption at the start of the period, system sales rose 12.3 per cent.
Numis Securities forecasts 3 per cent like-for-like growth for the full year along with a margin decline. Based on this, the broker predicts an 8 per cent rise in underlying EPS this year to 23.8p.
