Why Domino’s Shares Rose 0.95% Today

This morning Domino’s Pizza Enterprises Ltd. [ASX:DMP] share value has increased today. Shares are up by 0.95%

Now trading at a share value of $41.17, Domino’s have gone through a large amount of decreases over the past month. This time last year they were trading at around $58.12 a share.

With a market cap of $3.604 billion, Domino’s operates a large-scale food retail outlet, distributing their products on a worldwide basis, while managing a network of 2,000 stores.

Sales not making a difference in overall turnover

Earlier this month, Domino’s delivered a 2% fall in annual profits despite growing in UK sales.

Demand was cooled after a solid three years of expansion. A squeeze on UK incomes prompted customers to act on a more cautious basis as wage infatuation lagged a broader cost. 

The group plans to add another 75 new stores throughout this year, which is a lower amount than the expansion seen in 2017.

Domino’s ‘Winter Survival Deal’ turned over a poor performance in comparison to previous years.

However, overall sales still improved in the UK, as consumers controlling their budget turned to takeaway varieties rather than eating out, in order to save money.

Their sales were helped by the 95 store openings in 2017. They now plan to increase their overall store target of 1,600 stores in total.

Continuing to expand

Domino’s have turned their consistent conquest expansion to Bangladesh, as they are keen to expand into the country.

Through a joint venture with Indian company, Jubilant FoodWorks, and Bangladesh company, Golden Harvest, Domino’s will be able to open its first outlet.

The outlet is expected to open within a years’ time.

Quartz media reported that Jubilant FoodWorks CEO, Pratik Pota, stated:

As the eighth most populous country in the world with the highest population density and a young demographic, the Bangladesh market presents a great growth opportunity for Dominos.

Bangladesh has a very small pizza market, but is growing as its size has increased from $2 million to $3.7 million between 2011 and 2015.

Regards,

Ryan Clarkson-Ledward,
For Money Morning

PS: Domino’s was long a darling of Aussie investors as it consistently rose in price. The last year has seen some of the shine come off. Does that mean it’s time to buy? It’s tough to say. Building your investment portfolio can be difficult without the right guidance. Kris Sayce from Money Morning is willing to help steer you in the right direction in his free report, The Ultimate Starters Guide for Buying and Selling Shares.


Ryan Clarkson-Ledward is an Editor at Money Morning.

Ryan holds degrees in both communication and international business. He helps bring Money Morning readers the latest market updates, both locally and abroad. Ryan tackles all the issues investors need to know about that the mainstream media neglects.

Ryan is also the Editor of Australian Small-Cap Investigator, a stock tipping newsletter that hunts down promising small-cap stocks by dissecting the latest events affecting the world.

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