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UK's Domino's Pizza profit slips as virus dents orders, adds costs

Domino's Pizza Group Plc posted a 2.7% dip in first-half operating earnings on Tuesday, hurt by a fall in overall orders and the additional costs of cooking and delivering its pizzas safely in the coronavirus outbreak.

Article originally published by Reuters. Hargreaves Lansdown is not responsible for its content or accuracy and may not share the author's views. News and research are not personal recommendations to deal. All investments can fall in value so you could get back less than you invest.

Domino's Pizza Group Plc posted a 2.7% dip in first-half operating earnings on Tuesday, hurt by a fall in overall orders and the additional costs of cooking and delivering its pizzas safely in the coronavirus outbreak.

Britain's largest pizza delivery chain said underlying earnings before interest and taxes (EBIT) fell to 51.4m pounds ($67.27m) for the six months ended June 28, from 52.8m pounds a year earlier.

A lockdown in the UK boosted the company as Britons ordered-in more, leading to a 23% rise in deliveries, but Domino's had to re-think operations, rationalise its menu, close restaurants during restocking and implement contact-free, hygienic deliveries.

System sales, which measure the total sales of the group's franchisee and corporate store systems, rose 5.5% in the UK and Ireland.

But the company, a franchise of U.S. based Domino's Pizza Inc, said total orders fell 5% as collection at its stores slumped by 44%, even as deliveries overall rose 12%.

Chief Executive Officer Dominic Paul also cautioned on the future. "While trading in the first few weeks of the second half has been encouraging, it is too early to conclude on how consumer behaviour will evolve," said Paul, who joined earlier this year as part of a management shake-up.

Domino's also said its deferred 2019 dividend would be paid in September, while it reviewed a total payout for the current year.

This article was from Reuters and was legally licensed through the Industry Dive publisher network. Please direct all licensing questions to legal@industrydive.com.

Article originally published by Reuters. Hargreaves Lansdown is not responsible for its content or accuracy and may not share the author's views. News and research are not personal recommendations to deal. All investments can fall in value so you could get back less than you invest.

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