Domino’s Pizza has warned over losses in its international arm and said it remains in discussions with franchisees amid an escalating row.
The pizza delivery company said it saw a “disappointing” performance in its international business, with “weak” system sales across all its overseas markets – down 2% on a reported basis to £25.1 million overall in the division.
It said it therefore no longer expects to break even in the international business over the full year.
In the UK, Domino’s reported a 3.1% rise in UK like-for-like sales for the 13 weeks to March 31.
The chain said like-for-like orders by volume fell 2.7% in the UK, but this was offset by a 5.1% hike in prices.
Online sales lifted 8.5%.
It confirmed that store openings continue to be hit by the ongoing dispute with disgruntled store operators.
The group opened four new stores in the first quarter – compared with nine opened in the same period a year earlier.
Domino’s boss David Wild said the group remains in an “open and ongoing dialogue” with its UK franchisees.
Domino’s is working to resolve a dispute with store operators, who have set up a group called Domino’s Franchise Association UK & Ireland, demanding more support from the company in the face of rising costs.
They also say Domino’s has asked them to open stores in existing locations, which they claim is affecting their profits.
Mr Wild said the firm is “actively exploring win-win solutions for stimulating growth and new store openings” with its franchisees.
On the overseas woes, he said: “Internationally, performance remains disappointing and trading visibility is limited.”
Mr Wild added: “Given persistently weak system sales in all our international markets, we no longer expect this part of our business to break even this year.
“We are therefore further tightening our focus on international costs and capital deployment.”