Hello everyone, and thank you for joining the Domino's Third Quarter 2025 Financial Result C all. My name is Gabby, and I will be coordinating your call today. During the presentation, you can register a question by pressing star followed by one on your telephone keypad. If you change your mind, please press star followed by two on your telephone keypad. I will now hand over to your [audio distortion] Andrew Rennie, CEO of Domino's. Please go ahead.
Thanks, Gabby. Good morning, everyone. Thanks for joining us today. Look, I'm really delighted to deliver some, what I think is positive news in a pretty tough environment. As you'll see from the Q3 results, we've delivered a solid Q3 performance, positive sales and operational momentum, in a tough, tough backdrop. In particular, I'm really pleased with the initial results from the introduction of our Chick 'N Dip brand , which we'll give a lot more detail about at our investor day coming up in a few weeks' time. Our franchisees, which I'm really proud of, continue to lead the industry not only with amazing delivery times, but we continue with them to mitigate increasing costs and potential impact from the budget that may come towards us.
We're in a really good place to deal with anything that's thrown at us, so I feel like we're set up for success, not only towards the back end of this year but leading into next year. We're on track to achieve our four-year profit expectations, as I said before, and we really look forward to setting out our future plans at investor day in December. Just a couple of numbers for you to walk away with. You know, total sales are up 2.1%. Our like-for-like sales are up 1%, split, of course. Total orders were down slightly, 1.5%. Collection was up 1.7%, just showing how much value means to consumers, and delivery is down a bit, which to us was expected, due to, you know, cost impacts, et cetera., on the business.
We had really good, positive feedback from customers from our Chick 'N Dip launch, so we're happy with where that's gone, and our Indian Feast has gone really well as well. The thing that impressed me most is that we've just gone through Halloween, which is one of the busiest days of the year, and the delivery times were once again outstanding, so our franchise partners once again have really nailed the operational side of that switch, which again ensures the long-term success of this brand. Once again, I'll just reiterate that we're maintaining our guidance, in the range of GBP 130 million-GBP 140 million EBITDA. New store openings are unchanged through the mid-2020s, and we just launched a new pod format, which helps us get into the smaller towns.
Quite exciting, and again, at our investor day in five weeks' time, we'll be updating on more of those detailed things, which are very exciting and the innovation that our team is bringing to this fantastic brand. With that, I will open the floor for questions.
Thank you very much. To ask a question, please press star followed by one on your telephone keypad now. If you change your mind, please press star followed by two. When preparing to ask your question, please ensure your device is unmuted locally. We have a question from Douglas Jack from Peel Hunt. Your line is now open. Please go ahead.
Yeah, good morning. Yeah, I've got four questions, actually, if it's possible, but if you like, we want to take time. In terms of the loyalty program, how many app users are now, got availability towards that? I knew, I knew you were about in, a few months ago. I was wondering if you're still at that level at the moment, if you want to do that one first.
Yeah, thanks. Thanks, Douglas. Yes, we're around that 3 million mark. It varies at the moment each week, so I don't want to try and give you an incorrect number, but it's around that 3 million number. It's still doing everything that we thought it would do. We still feel very good about that, and we still do plan to launch that in the back half of next year. At the investor day, we'll give much more detail about what we've learned, and we've got a pretty good presentation coming. Yes, it's around that number, Douglas.
In terms of the Indian Ultimate Feast, I mean, that's [ 7.92%] sales, so only launched towards the end of Q3. The impact it could have had on like-for-like sales if it was launched, say, at the start of Q3. Would you, obviously, you wouldn't expect that level to fully go through. I'm guessing there'd be some rotation going on between products.
Yeah, that's spot on. I mean, typically, you're replacing some of the other LTOs at that time, Douglas. People will switch out of maybe their favorite pizza instead of just getting a Pepperoni Passion and, say, a medior, or maybe they get a Pepperoni Passion and an Indian Feast. There is a bit of swapping out. It does help like-for-like a little bit, but as you said, at the back end of Q3, it hasn't had a very big impact at all.
In Q3, I think the cheese price has been falling, as opposed to being up quite a lot in the first half. Is that helpful towards your margins in Q3 or are there other things at play? I know you don't really want to get into too much detail, margins that being on their trading update.
Yeah, we're not going to talk about margins, but just remember that we have a mechanism in place that often tails cheese pricing. When it goes up too much, we don't feel the impact. Sometimes when it gets leveled out and likewise when it goes down. Those things will for 2026 because that gives us a great, for pricing into next year. It's a good thing, but it doesn't have an impact in the immediate, short term.
Okay, thanks. Last question. The pipeline, the new store pipeline for 2026, obviously, the expansion rate slowed a bit in 2025. Does that point to sort of higher quality openings, good pipeline of available sites for next year as things stand at the moment?
Yeah, I'd like to get more detail on that on the capital markets day or sort of the end day, simply because we've got four or five different points that we want to sort of, particularly around these new pods. All our openings, we don't open a store unless we believe it's going to be a quality opening. So the 20s that we'll get this year are high quality. We want to lay out sort of a longer-term plan, not just focus on next year. We want to focus on a long-term as well, when we update everyone in five weeks' time.
That's great. Thank you very much.
Thanks, Doug.
Thank you. Our next question is from Katie Cousins from Shore Capital. Your line is now open. Please go ahead.
Hi guys. Thanks for the time. For me, if I may, first on the loyalty program too, you previously talked about seeing 10% incremental sales coming from loyalty program. Is that, is that still kind of the thinking at the minute?
Look, I don't want to give away too much. We're still finalizing the data, and remember in the early days, we're talking to customers [audio distortion] who buy pretty irregularly. I'd rather save that for the investor day. What I can say is it hasn't changed from what we've seen at the start. We still continue to see good incrementality. You've got to discern between incrementality of a consumer buying a bit more versus sales. I mean, they're two different things, right? The more detail I can give you will be in the Investor Day because I think you need to see the whole picture. Having said that, we're very happy with how it's going.
Cool. Okay. And, just thinking about Q3, like-for-like trends, obviously, we had a weak run rate to start with, picking up in July. How did that look in August and September?
Yeah, look, it wasn't too bad. We don't break it out specifically, but yeah, we've, you know, it did as we expected it to do. We feel as though that Q4, all going well, will do what we expected to do as well. It is, the consumer is in a tough place out there at the moment, right? We all recognize that. We've taken the tough decisions on pricing and all the rest of it we need to do to make sure that our franchisees and our business is in a really good place profitability-wise. That's working. We're setting ourselves up for a very good 2026 regardless of what happens in the budget. That's what I feel very comfortable about.
Okay. Thank you. And then finally, just on share buybacks, obviously, you have the GBP 20 million one, but how should we think about that capital allocation over the 2026 and 2027?
Again, at the Investor D ay, we'll give an update on the capital allocation, etc., because I think it's a topic that would be disingenuous if I tried to explain it here right now. I think the board needs to be fully signed off on the plan. Yeah, we've been analyzing that, and I think we'll have some definite updates on the Investor Day.
We said that, barring, you know, barring any move on a second brand, that we would look at the position as we do every year again at the end of the year. If you put the GBP 20 million in your models and see the level of gearing we have, as we exit this year, we're at the upper end of our one and a half- to two and a half-times range. In terms of our capital allocation model, we've applied it consistently. We've returned the best part in dividends and buybacks of GBP 500 million over the last five years. No change, no update there, and the buyback went down well with our investors.
Brilliant. Thank you very much, and I'll be patient for the Capital Markets Day.
Thank you very much. Appreciate it.
Thank you, Katie. Our next question is from Hai-Huyen from UBS. Your line is now open. Please go ahead.
Hi, it's Hai here at UBS. Thank you for taking my question. My first one is, how are you seeing the competitive landscape over Q3? Volumes were down, pricing up, but did you gain volume share or in Q3 were you in line with the market in terms of the volume development? What about the pricing in the industry? Have you seen competitors also increasing prices? Just to follow up on that, what are the pricing plans for the rest of the year and into FY 2026? That's my first question, please.
Just to comment, we obviously, we only see and talk about revenue data for the system. People do not disclose volumes of shipment orders by industry by pizza. I think you just want to talk about the pricing environment and the market. I think we have gained a little bit of share again.
Yeah, look, Hai, all I would say is that our market share has grown again, which is the best sign that we're winning, winning in the pizza space. When we see around the marketplace what others are pricing, they're pricing very similar to us. We don't have, we're not at a disadvantage, which again shows why we're growing market share. Yeah, we won't talk too much about pricing because it would be stupid for me to lead, for our competitors on what we intend to do with pricing. All I can say is that our cost structures look very stable for next year. Obviously, we're all waiting for the autumn budget, but we've factored a lot of thinking in around that already. We feel pretty comfortable with where our pricing is today, and we feel very comfortable with where we roll into 2026.
Yeah, we have said in the statement, and sorry, it's Richard Snow, the Interim C F O here. I realize that the call moderator didn't introduce me. We have said we expect order count positions to be weakened for next year because of the pricing environment and because of what we've heard from Rachel Reeves today.
Correct.
Understood. Got it. Regarding the CapEx, I believe the last time, in half one it was guided GBP 22 million. Now it's GBP 25 million. What's the main driver of the increase? Is that the warehouse automation, but you've talked about that already, or is it the Chick 'N Dip or the new internal, you know, manual?
No, no, no. You're exactly right. It's accelerating the investment in automation. Of course, next year you'll see higher CapEx. We haven't given a number yet, but obviously higher CapEx because of the supply chain fiber investment. Andrew, do you just want to talk about the benefits of that?
Yeah. First of all, there's no CapEx involved in Chick 'N Dip . It's all, all the CapEx is going towards becoming a more efficient system through automation and building more capacity, as we've spoken about before, for the SEC File. That's all on track. We feel very good about that. That automation is now starting to roll out and see the benefits of that. We'll see the real benefits of that as we roll into next year. The CapEx has a fantastic ROI on that CapEx. We feel very good about it.
Understood. And my last question, please. You opened 18 gross new stores year to date. Where have you been opening mainly? Is that smaller address count area? Is that Ireland, Northern Ireland, or within England?
It's a good, it's a good mixture of everywhere, Hai. There's no particular area that we've focused on. It's just availability of locations, planning, acceptance. Yeah, so they're pretty well spread everywhere. Some are small towns. Some are fortressing of, splitting current stores. Some are in Ireland. Some are in Scotland. Yeah, there's no specific area that we've targeted.
Sure. And on the smaller address count areas, is that in line with what you've said before in terms of higher average weekly sales from those new smaller address count areas than expected?
Yes. All of them penetrate at a higher return per address compared to the rest of the market. Yes, that hasn't changed.
Got it. Thank you very much.
You're welcome, Hai. Thank you. Thank you for your questions.
Thank you. Our next question is from Anubhav Malhotra from Panmure Librerum. Your line is now open. Please go ahead.
Hi, team. Thank you for taking my questions. Just a couple from me, please. Maybe on the, on the 5% pricing in the quarter, if you could help split that into how much of it was due to lower promotions, how much of it was due to higher menu prices, and was there any changes to the delivery charges that are charged to consumers. Then maybe on the Chick 'N Dip side, can you give us some clue on how the consumer has been ordering the Chick 'N Dip ? Has it been mostly a case of an add-on to an existing pizza order, and or in some cases, has it been a case of a separate order, just a Chick 'N Dip order on its own? Thank you.
Yeah. There is no simple answer for what you've asked, unfortunately, because some franchisees have put delivery pricing up, some franchisees have put delivery fees down, some franchisees are a little bit more aggressive, some franchisees are being less aggressive. I would say that our pricing has not changed in terms of strategy than what it has in the last 12 months or so. Price has not really been a major factor in what we've been achieving. If you look at it, we've got a strategy that we've deployed that, yes, has taken into account cost increases, particularly with national insurance, etc., but that is across the board. Yeah, it is too intricate to try and disseminate across nearly 1,400 stores all the ups and the downs, right? Because every franchisee has his own strategy in terms of their own area. We are seeing some great success. We've got some franchisees that are growing very, very nicely, actually.
Most importantly, franchisee profitability is in a good place, right? We've been able to regain a lot of the profits that were taken from the higher costs, etc., from wages and from national insurance. We are going in a really good direction on franchisee profitability, which is our main focus. Your question about Chick 'N Dip , look, I do not want to give too much away again because our investor day is going to go into more detail, and it would be wrong for me to give you bits and pieces. All I will say is it is a combination of new customers and customers ordering with pizza and without pizza. It is all those. It ticks all those boxes, and it has performed sort of ahead of what we expected, to be fair.
We are very, very happy with what we have seen so far. Again, on the Investor Day, you will get much more detail.
Perfect. Thank you so much.
No worries, Emma.
Thank you. As a reminder, to ask a question, please press star followed by one on your telephone keypad.
Gabby, I think if there's no more questions, I'll finish up by just saying, first of all, thank you very much for everyone for their time for joining. I really appreciate it. I feel really good about the company. I feel really good about our core business and where it is in this environment. I think we always have to put it in context of versus others. I think when you see that we continue to grow our market share in a tough environment, we continue to give outstanding delivery times, which is best in class. Our franchisees' profits continue to be some of the strongest in the world. Our customers keep telling us that they love what we do in terms of product quality and innovation. I'm very excited about Chick 'N Dip and what the team have done. It's been quite incredible.
And loyalty, again, is on track and doing as we expected. A lot of great levers there, plus the automation. I'm really excited. I've got all my team coming along to present at the Investor Day five weeks away, and I think you're getting a lot more detail about the core of this business and how strong it is and where we're going. We feel very positive, and hence why we're excited to come to the Investor Day and showcase everything that we can do. The environment's tough. We know that, right? Even with a tough environment, we feel like we've set the business up to deal with whatever comes at us with the budget. I really look forward to presenting to everyone in more detail at the Investor Day. Thank you very much, Gabby, and thank you everyone for attending.
Thank you. This concludes today Domino's third quarter 2025 financial results call. Thank you for joining. You may now disconnect your lines.