Domino’s profits up, but miss guidelines

Inside Franchise Business: Domino's releases full year profitsDouble-digit sales growth in Australia, New Zealand and Europe have helped fast food franchisor, Domino’s Pizza, report a full year net profit of $102.9m, a rise of 24.8 per cent.

However, the pizza giant has missed full-year profit expectations due to weak sales in Japan and France.

Don Meij, CEO, said “I acknowledge our results, while strong, did not reach the guidance we set. This was largely due to the delay in rectifying some issues with our online platform in France, and the initial response in H2 to our value range offering in France,” Meij said. “Both have now been addressed.”

Domino’s had anticipated net profit and underlying earnings would rise 32.5 per cent.

The company said underlying net profit for the 12 months to July 2 grew 28.8 per cent to $118.5m, while earnings before interest, tax, depreciation and amortisation rose 28.3 per cent on the prior year to $230.9m.

Revenue for the year to July 2 has risen 15.4 per cent to $1.07 billion.

Domino’s said FY18 had started well, but indicated that same stores sales in the Australian and New Zealand market would likely be lower in the first half.

The group has plans to open between 180 and 200 new stores in FY18 and expects net profit to increase by about 20 per cent in FY18.

Wages underpayment

The full year report also revealed the pizza franchisor’s capacity to prevent franchisees underpaying staff wages.

Independent assessment by Deloitte recommended:

  • An enhanced monitoring system
  • Development of a predictive risk based data analytic tool
  • Enhancing the employee complaints management process
  • And the creation of an independent whistle-blowing channel

Domino’s has introduced the Tanda rostering system, and has recruited seven further staff to conduct the nationwide audit which has so far completed 15 store audits, with 41 ongoing.

Training on employment law compliance is included in an initiatl six-week induction program.