Domino's shares plunge despite profit jump; Cochlear, Whitehaven Coal lift profits
Domino's Pizza shares have plunged after the chain missed its full-year earnings guidance, as Cochlear and Whitehaven Coal report full year net profits.
Domino's Pizza (ASX: DMP) shares have plunged after the chain missed its full-year earnings guidance and indicated slowing sales in Australia in the new financial year.
Excluding one-off charges totalling $14.5 million relating to its European and Australian operations, full-year underlying profit rose 15 per cent to $136.2 million, missing the group's profit growth guidance of 20 per cent.
Domino's statutory net profit jumped 18 per cent to $121.5 million for the year ended July 1, thanks to strong demand for its pizzas and new store openings, and forecast comparable store sales to be three to six per cent higher in 2018/19. Revenue was up 7.5 per cent to $1.15 billion.
Chief executive Don Meij says the the company has delivered positive growth in all its markets as the group pushed ahead with bolstering its store network.
"The results of this year reinforce our confidence in our business," , Meij said on Tuesday. "Strong store metrics with increasing profitability mean internal franchisees are opening new stores and building their businesses," he said.
Domino's added almost six stores a week in 2017/18, building 145 new stores and acquiring 163 stores from other brands. The group plans to add between 225 and 250 stores in 2018/19.
Domino's shares fell sharply in opening trade, however, and were down $5.20, or 10 per cent, to $47.22 at 1048 AEST in a higher Australian share market.
In outlook the group indicated same store sales for Australia and New Zealand were slower for the first five weeks of the new year at 3.9 per cent, compared to 4.5 per cent for 2017/19.
Europe same-store sales were also slower in the new year, while Japan had sharply lifted business to show same-store sales growth of 12 per cent.
In Australia and New Zealand for 2017/18, the group's annual network sales rose 7.7 per cent to $1.12 billion, driven in part by 50 new stores.
Its European operations delivered a 16.9 per cent jump in network sales to EUR642.1 million ($A1.0 billion), thanks to the opening of 68 new stores and 163 recently acquired Hallo Pizza stores.
The pizza chain will pay a final dividend of 49.7 cents a share, partially franked, up from 44.9 cents a year earlier.
The numbers
- Net profit up 18pct to $121.5 million
- Revenue up 7.5pct to $1.15 billion
- Final dividend 49.7 cents, partially franked, up 4.8 cents from 44.9 cents
Whitehaven full-year net profit up 29.7 per cent
Whitehaven Coal (ASX: WHC) has reported a 29.7 per cent jump in full-year net profit, driven by the recent high prices of thermal coal.
The east coast miner's profit for the 12 months ended June 30 rose to $525.6 million, while revenue for the year was up 27.3 per cent to $2.26 billion.
Whitehaven will declare an unfranked final dividend of 14 cents per share, along with a special dividend of 13 cents a share.
Analyst note to follow.Cochlear lifts full-year net profit by 10 per cent
Cochlear (ASX: COH) has reported a 10 per cent rise in full-year net profit, thanks to solid demand for its hearing implants, and flagged an eight to 12 per cent jump in net profit for the new financial year.
Net profit for the 12 months to June 30 rose to $245.8 million, from $223.6 million a year earlier, on the back of a nine per cent rise in sales revenue to $1.35 billion.
Cochlear will pay a final dividend of $1.60 a share, an increase of 20 cents over last year, and has forecast 2018/19 net profit to be between $265 million and $275 million.
Despite meeting guidance and consensus expectations, shares in Cochlear fell over 6 per cent in the first hour of trading on Tuesday. Morningstar analyst Chris Kallos questions whether the market was too optimistic about the company's top line growth prospects and the growth of the implant market going into the result.
© [2018] Australian Associated Press Pty Limited (AAP) or its Licensors. This is the Morningstar service with content provided by AAP where indicated. AAP reserves all rights, including copyright, in services provided by it. The information in the service is for personal use only, does not constitute financial product advice (whether general or personal) and may not be re-written, copied, re-sold or re-distributed, framed, linked or otherwise used whether for compensation of any kind or not, without the prior written permission of AAP. You should seek advice from a professional financial adviser before making decision to acquire or dispose of a financial product.
This service is published for general information purposes only without assuming a duty of care. AAP is not in the business of providing financial product advice (whether personal or general advice), and gives no warranty, guarantee or other representation about the accuracy of the information or images contained in this service. AAP is not liable for errors, omissions in, delays or interruptions to or cessation of the services through negligence or otherwise. The globe symbol and "AAP" are registered trademarks.
