Key Takeaways:
Domino's Pizza Group PLC (LSE:DOM) shares rose 4% after the company reported first-quarter sales growth that significantly outpaced analyst expectations, driven by consistent order momentum and higher prices.
"Continued sales momentum should support a re-rating from a price-to-earnings multiple of around 10 times," analysts at Peel Hunt said, reiterating a buy recommendation and a 275p price target on the stock.
The takeaway chain's like-for-like sales, excluding store splits, grew 4.5% in the first quarter of 2026, well ahead of the 2% full-year growth assumption from Peel Hunt. Total sales for the period increased 5.8%, while total orders were up 2.3%.
The results suggest a positive start to the year for the UK's largest pizza delivery company, with the performance described as consistent across January, February, and March. The sales figures imply like-for-like price growth of approximately 3.5% and net store expansion of 1.4% after accounting for store splits. The company's stock climbed to 190.32p on the news.
The strong performance in the UK contrasts with more modest growth expectations for Domino's international operations reported by its US-listed counterpart, Domino's Pizza Inc. (NYSE:DPZ). Wall Street analysts, according to data from Zacks Equity Research, had projected just 0.9% same-store sales growth for international stores in the most recent quarter.
The update signals that management's strategy is delivering results in its core market. Investors will now watch for the second-quarter results to see if the sales momentum can be sustained, which would support the case for a higher valuation.
This article is for informational purposes only and does not constitute investment advice.
