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The pandemic-led food delivery boom, supported by a raft of new store openings, has boosted the half-year net profit for Domino's Pizza (ASX: DMP) by 32.8 per cent to $96.2 million.
The news sent Domino's shares past the $100 mark for the first time today, to a high of $104.49 after a solid morning session that saw share values rise by almost 7 per cent. Domino's is now worth $16.78 billion on the ASX.
The December half-year profit result has been built on a 16.6 per cent increase in global group sales to $1.84 billion, with a remarkable $1.41 billion of those sales from online purchases. Online sales grew 25.4 per cent in comparison.
The H1 results for FY21 affirm Domino's digital strategy that has helped the company grow its business globally, with the company identifying that the COVID-19 disruption has brought forward long-term demand for delivered food, ordered online, in all markets.
"The performance this half predominantly reflects the benefits from investing in, and strengthening, our franchisee base and expanding our store footprint on a global scale, and the efforts of tens of thousands of our people executing against our strategy," says group CEO Don Meij.
Domino's opened 131 stores during the half year, predominantly in Japan and Europe, bringing its stores total to 2,795.
"Despite the unique challenges of this time, store openings have accelerated with an average of five new stores opening each week, which reflects the confidence Domino's, and our franchisees, share in our future," says Meij.
He has affirmed the company will "significantly outperform" this result in the current half-year.
Although food deliveries are higher overall, Meij notes that some areas face challenges where sales from deliveries have failed to offset the loss of carry-out orders, especially in CBD areas. This has led to same-store sales growth of 8.5 per cent being lower than expected.
"There is no doubt that Japan and Germany have exceeded already high expectations for heightened order volumes, with additional COVID-specific growth. But this was only possible because of the leadership and expertise of our teams in preparing and training for this growth.
"Equally some markets such as the Benelux, which were carry-out focused prior to COVID-19, have been challenged, and we recognise the efforts of our marketing teams and stores in adjusting their efforts to grow sales despite these changes."
Franchisee profitability remains strong at 20.8 per cent, with Meij noting that 92.5 per cent of new franchised stores are being opened by existing franchisees or store managers.
The sales momentum has continued into the current half, with network sales 20.9 per cent higher and same-store sales up 10.1 per cent.
"We continue to experience uncertain times but have confidence the clear principles that have delivered Domino's success, before and during COVID-19, will guide this next phase," says Meij.
"Our team's agile response to changing conditions has lifted our expectations for full year performance to be even higher than our already positive, medium-term outlook."
Domino's is paying an interim dividend of 88.4c per share, up 21.7c per cent from the previous corresponding period.
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