Domino’s lowers FY guidance amid tougher market

Domino’s has downgraded its full-year earnings forecast to between £130m and £140m, following a challenging first half marked by cautious consumer spending, rising employment costs and slower store expansion.

In the 26 weeks to 29 June, total orders were flat, with like-for-like sales down 0.1%. The pizza delivery chain saw sales slip by 0.7% in the second quarter as cost pressures prompted franchisees to pull back.

Despite this, Domino’s system sales rose 1.3% to £777.8m, while group revenues increased 1.4% to £331.5m during the period.

The group opened 11 new stores during the period and now expects total openings for the full year to fall in the mid-twenties. It maintained, however, that the pipeline for 2026 remains “healthy”.

Underlying EBITDA fell 7.4% to £63.9m during the period and underlying profit before tax fell 14.7% to £43.7m. Statutory profit before tax fell by 31.8% to £40.5m compared with the same period last year. 

Despite the near-term pressures, Domino’s said it had grown its share of the UK takeaway market by 20 basis points to 7.2%, and of the UK pizza takeaway market by 560 basis points to 53.7%.

Andrew Rennie, chief executive of Domino’s, said: “Against a more difficult market backdrop, Domino’s is significantly increasing its market share by offering great value, innovative products and even faster delivery times. This is a result of a relentless focus from our colleagues and franchise partners, and I’d like to thank them all for their hard work.

“There’s no getting away from the fact that the market has become tougher both for us and our franchisees, and that’s meant that the positive performance across the first four months didn’t continue into May and June.”

He added: “Despite these near-term challenges we remain confident in our strategy and the prospects for our resilient, market-leading business.”

The group also reported improvements in customer service, with average delivery times falling to 24.1 minutes, down from 24.6 minutes a year earlier. Its loyalty trial is reportedly ahead of expectations, with a full rollout planned for 2026.

Looking ahead, the company said like-for-like sales and order volumes had improved towards the end of July. However, it warned that consumer confidence remained weak and flagged ongoing cost pressures.

If no acquisition is announced by the end of 2025, the board expects to resume share buybacks. A second brand remains part of the group’s strategy, but no current opportunities under consideration would require equity issuance.

Capital investment for the full year is expected to be around £22m, with year-end net debt projected between £260m and £280m.