Domino’s profits tumble as Ukraine war and reopening bite
Domino’s Pizza has reported a 16% fall in first-half pretax profit, following rising costs and food inflation.
The firm, which vowed to increase media spend to lure more customers, blamed the conflict between Russia and Ukraine, two major grain exporters, for driving up global wheat prices and heightening concerns about flour supply.
Energy prices have also surged, with knock-on effects for inflation across the economy.
Chief Executive Dominic Paul said the company was better placed than many to cope with cost increases because of its robust supply chain.
Despite the fall in profits, it increased the dividend to 3.2 pence from 3 pence last year and launched a £20million share buyback programme.
The London-listed company, which saw underlying profit before tax fall to £50.9million in the first half, said profitability would be weighted to the second half as it passes on costs to its own franchisees, helping it to maintain its annual outlook.
Domino’s shares dropped 5.6% following the announcement and the pizza chain’s stock price is down 40% since the start of the year, with consumers spending less on ordering in since lockdown restrictions ended.