SHARES IN Domino’s Pizza fell almost four per cent yesterday after the company surprised the City with slower-than-expected third quarter sales.
The group, which has 770 stores in Britain, Ireland, Germany and Switzerland, said like-for-like sales increased 3.7 per cent over the 17 weeks to 23 September.
This contrasts with an 8.1 per cent jump in the last quarter and 4.1 per cent in the third quarter of 2011.
Wayne Brown, analyst at Canaccord, said: “The degree of the slowdown will come as a surprise especially as this period should have seen a benefit from the Olympics.”
Domino’s shrugged off concerns, attributing the weaker sales to a 43 per cent cut in ad spend from last year, when the launch of its stuffed crust and Gourmet Pizza range drove sales.
The results also faced a tough comparison in the previous quarter, when record levels of rainfall prompted more consumers to order takeaway.
Total sales grew 7.9 per cent to £136.4m in the period compared with £127m last year while total online sales rose by 39.3 per cent to £62.8m.
Online sales now account for 58.4 per cent of UK revenue while 18.5 per cent of Domino’s customers ordered through their mobile devices.
The group plans to open 60 UK stores this year but only 30 have been launched in the year-to-date due to “planning challenges”, raising analysts’ concerns it will not reach its full year profit target.
Chief executive Lance Batchelor said the fourth quarter was traditionally the strongest period and he was “confident” of meeting City consensus earnings of £46.6m for the full year.