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.
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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%.
