Domino's (ASX:DMP) share price jumps 4% following FY21 results

The company performed strongly in FY21…

| More on:
a happy man eats pizza in his kitchen with a long string of cheese between the pizza slice in his hand and in his mouth.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Domino's Pizza Enterprises Ltd (ASX: DMP) share price is flying in early trade on Wednesday. This comes as the pizza chain operator released its full-year results for the FY21 financial year.

At the time of writing, Domino's shares are trading up 3.7% at $131.7.

Domino's share price jumps on record result

The Domino's share price is up after the company delivered another robust result for the 12 months ending 30 June 2021. Here are some of the key highlights:

  • Network sales increased 14.6% year-on-year (YoY) to $3.74 billion;
  • Online sales grew 21.5% YoY, contributing $2.93 billion;
  • Underlying earnings Before Interest and Tax (EBIT) jumped 27.2% YoY to $293 million;
  • Net profit after tax (NPAT) surged 29.2% YoY to $188.2 million;
  • Earnings Per Share (EPS) rocketed 28.7% YoY to 217.6 cents per share; and
  • Final dividend lifted to 85.1 cents per share, bringing the total dividend for FY21 to 173.5 cents per share, up 45.4% YoY.

What happened in FY21 for Domino's?

Sales momentum continued throughout the year for Domino's despite challenging conditions caused by COVID-19. Rapid changes were made to store operations in response to local restrictions as well as local lockdowns. Carry-out sales were impacted while delivery orders continued to remain strong.

Over the period, Domino's opened 285 new stores, reflecting 10.7% of its entire network. This surpassed the company's previous target of between 7% to 9% within its 3-year to 5-year outlook. Japan led the way with a record 126 stores opened in the calendar year.

In addition, same-stores sales growth improved 9.3% compared to prior forecasts of 3% to 6%.

As a result of the strong operating cash flows, Domino's reduced its net debt by $118.7 million to $328.6 million.

What did management say?

Domino's group CEO and managing director Don Meij commented on the milestone achievement, saying:

We remain of the view Domino's performance throughout COVID is a direct result of our long-term investments and strategy; fortressing our markets, digital delivery, 3TEN and indeed franchising itself.

The results this year highlight the importance of franchisee profitability, particularly returns on new stores, to our growth. We will apply this growth-focus to Australia/New Zealand through Project Ignite, a multi-million program to build out our store network, positioning us for existing and future delivery demand.

We expect Domino's Pizza Enterprises Ltd to deliver significant profit increases over the medium term…

What's next for Domino's?

Looking ahead, Domino's noted that it will continue to experience some disruptions to its sales base from COVID-19 lockdowns. However, digital delivery is expected to accelerate across all geographical markets.

It noted that FY22 will be a record year for store expansion, adding organic and acquired stores.

While COVID-19 remains unpredictable, the company is closely monitoring commodity pricing and supply chain pressures.

Domino's reported that FY22 has started with a solid base with 2,974 stores (including 26 opened this financial year). So far, the group has achieved network sales growth of above 7.7%.

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Dominos Pizza Enterprises Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Earnings Results

A man sits thoughtfully on the couch with a laptop on his lap.
Technology Shares

Up 74% in 2024, why is this ASX 200 stock rallying today?

Recurring revenues continue to grow.

Read more »

Man pointing at a blue rising share price graph.
Earnings Results

Guess which ASX All Ords share is soaring on 21% FY 2024 growth

Investors are piling into the ASX All Ords share today. Let’s find out why.

Read more »

Girl sliding down on snow with arms spread out.
Earnings Results

Elders shares on ice for a $475 million acquisition after profits plunge 55%

What on earth is going on with Elders shares today?

Read more »

A man has a surprised and relieved expression on his face. as he raises his hands up to his face in response to the high fluctuations in the Galileo share price today
Energy Shares

This ASX 200 mining stock just reported a 40% earnings jump

Investors appear pleased with this miner's performance during the first quarter.

Read more »

Business people discussing project on digital tablet.
Earnings Results

2 ASX All Ords shares surging over 10% on strong results

Investors are buying these shares in response to strong results this morning.

Read more »

A young woman holds her hand to her mouth in surprise as she reads something on her laptop.
Earnings Results

Xero share price rockets to record high on explosive half-year growth

The tech star delivered another impressive half year results this morning.

Read more »

A man cheers after winning computer game while woman sitting next to him looks upset.
Earnings Results

2 high-flying ASX 200 gaming shares splitting ways today

Which gaming giant is winning the admiration of investors amid results?

Read more »

Male building supervisor wearing high vis vest and hard hat stands and smiles with his arms crossed at a building site
Industrials Shares

This $23 billion ASX 200 stock is surging 6% while the market sinks. Here's why

This ASX 200 stock is shrugging off the wider market sell down today and racing higher. But why?

Read more »