Takeaway food firm Domino’s Pizza (DOM) is among the most-shorted stocks on the London market and expectations were downbeat heading into FY25 results.
However, Domino’s delivered slightly better-than-feared FY25 revenue amid further UK takeaway pizza market share gains. This news sent the shares up 3.2% to 192.3p, overshadowing a 15% drop in annual profits.
There was also relief as the pizza chain assured investors FY26 performance is tracking in line with market expectations.
Positive Christmas trading momentum has carried over into the first 9 weeks of 2026.
Solid base to build on?
Domino’s Pizza has a 52.6% slice of the UK pizza takeaway market. And millions of customers use its app, giving Britain’s leading pizza brand a solid base to build on.
Yet in common with other UK restaurant operators such as Greggs (GRG), the FTSE 250 firm is grappling with higher staffing costs and a challenging consumer backdrop.
Cost-of-living pressures are dragging on consumer spending.
FY25 underlying pre-tax profit fell 15% to £91.2 million, not helped by a rise in finance costs arising from Domino’s higher average net debt levels. Group revenue fattened up 3.1% to £685.4 million, underpinned by an increase in corporate stores revenue.
Like-for-like system sales across the UK & Ireland grew by a modest 0.2% last year, while delivery orders were down 1.7% with a soft H2 performance reflecting a weaker market.
What did the CEO say?
Interim CEO Nicola Frampton said: ‘In 2026, we are focused on strengthening our core business and driving disciplined execution across the organisation.
‘In particular, we are excited about a number of strategic and operational initiatives to drive sustainable growth, including: the successful system-wide launch of CHICK ‘N’ DIP; a strong pipeline of wider product innovation; the development of our loyalty program and continued enhancements to our industry-leading supply chain.’
Frampton added: ‘These initiatives, combined with Domino’s exceptional brand and strong market position, give me great confidence in our ability to create further value for our customers, franchise partners and shareholders.’
Domino’s Pizza is a clear market leader whose strong cash-generation supports a progressive dividend.
But the indebted company is struggling to generate meaningful revenue growth. There is also uncertainty at the top, with both the CEO and CFO having departed in the past year.
Despite the positive reaction to today’s numbers, Domino’s shares are still down 45% on a five-year view with hedge funds betting against the company.
Although the stock appears cheap on just 10.2 times forward earnings, we share the ‘smart money’s’ bearish stance on the stock.
Read the press release here: https://investors.dominos.co.uk/investors/overview
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