Domino's (DMP) result shows a soft base
Stock
Domino's Pizza (DMP) $47.39 as at 14/08/2018Event
The result was undercooked at Dominoes this morning, and the stock is trading down 9% at the time of writing as the market sends back their orders. The big revenue miss into a smaller profit miss shows that an effort is being made to reduce some costs within the business, contrary to the markets expectations of growth for the company. NPAT growth of 15% for FY18 was well below the company’s previous guidance “in the region of 20%,” and the subdued progress looks set to continue with the company also missing on expectations into FY19. Same store sales growth was below expectations in the two biggest markets – ANZ & Europe – both guided to 6-8% for FY18 but Domino's only managed 4.5% & 5.7% respectively.
Key to the commentary was FY19 EBIT guided to $227m - $247m, while consensus was looking for $251.7m next year = about a 6% miss to the middle of the range.
Domino's Pizza (DMP) Chart
