UK's Domino's Pizza to stop raising prices, expects profit beat
Reuters
Published Aug 01, 2023 02:27AM ET
Updated Aug 01, 2023 05:20AM ET
By Radhika Anilkumar
(Reuters) -Britain's Domino's Pizza (NYSE:DPZ) Group said on Tuesday it does not expect to raise its product prices further at the moment because the cost of cheese and pizza boxes is starting to stabilize, and forecast its full-year profit would beat market expectations.
Shares in the company rose as much as 9% at 380 pence in morning trade.
The group, which had raised prices over the last year to offset surging inflation in the Britain, does not to plan to hike prices "right now", interim Chief Executive Elias Diaz Sese said in an interview with Reuters.
The franchisee of U.S.-based Domino's Pizza Inc also announced a 70 million pound ($89.78 million) share buyback programme following the disposal of its German associate in June.
While the costs of some ingredients have consistently declined in the last few months, high meat prices still pose as a challenge for the pizza group, Diaz Sese said.
A recent fall in the price of ingredients such as cheese and avocado has helped drive up profit margins at major U.S. fast-food restaurant chains like Domino's and McDonald's (NYSE:MCD).
Domino's Pizza Group now expects an underlying core profit of about 132 million pounds-138 million pounds for the year, excluding about 9 million pounds from investments in its technology platform.
Analysts on average expect a profit of 127.6 million pounds, according to a company-compiled consensus.
In the first half of the year, the group's total orders increased 2.8% to 35.4 million pounds, helping underlying core profit rise by 8.2%.
The group, which operates in Britain and Ireland, said its market share in those two markets combined increased to 7.3% in the second quarter from 6.6% a year earlier.
($1 = 0.7797 pounds)
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Written By: Reuters
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