Domino’s Pizza Group Reports Mixed FY25 Results: Revenue Rises but Profits Fall, Dividend Up 3%

Domino’s FY25 at a glance: revenue up, profits down, dividend lifted

Domino’s Pizza Group (DPG) has delivered full-year numbers broadly in line with guidance. Headline revenue and system sales edged higher, but profits stepped back as supply chain margins and lower order volumes bit. The Group is keeping the dividend moving up and says the first nine weeks of 2026 have continued the positive Christmas momentum.

Quick jargon check:

• System sales – total consumer sales across franchised and corporate stores (ex VAT).
• Like-for-like (LFL) – growth from mature stores, stripping out territory splits.
• Underlying EBITDA – profit before interest, tax, depreciation and amortisation, excluding one-off items.

Key FY25 numbers investors should know

What drove the profit squeeze in FY25?

Supply chain margin and overhead investment

Underlying EBITDA fell 6.6% to £133.9m. Management points to lower H2 volumes, a mix-driven gross margin decline in the supply chain and higher rebates, plus deliberate investment in “skills and capabilities” that lifted overheads by £5.6m. Supply chain EBITDA was down £10.4m, only partly offset by £3.9m growth from corporate stores and £2.9m lower tech costs as the ERP rollout completed.

On the statutory side, profit also absorbed non-underlying items of £10.1m. The big one was a £10.4m impairment at Shorecal (Ireland/Northern Ireland) linked to tougher conditions and the transition of drivers to employee status in Ireland, which has structurally raised delivery labour costs. DPG also booked £6.0m of transaction costs on deals that did not proceed and called time on “second brand” initiatives. A brighter spot: the 25% disposal of Full House brought in £17.6m and a £9.9m gain.

Orders mix and a solid Christmas

Total orders dipped 0.9% year on year. Delivery orders were down 1.7% amid a weaker market in H2, while collection returned to growth, up 0.5% for the full year after a national value-led ad push. Despite the softer order count, system sales rose 1.5%, helped by price/mix. The group finished the year well, and says the first nine weeks of 2026 have continued that positive momentum.

Cash, debt and dividends: what the balance sheet says

Cash generation remains the safety net. Free cash flow before non-underlying items came in at £84.6m, underlining the cash generative model even in a tougher trading year. Capital allocation totalled £98.8m, including £24.1m capex, £43.4m in dividends and £20.1m of buybacks, alongside the Victa DP step-up (to 70%) partly offset by proceeds from the Full House disposal. Net debt rose to £284.6m, taking leverage to 2.26x – still within the 1.5x-2.5x target range but nearer the top.

Debt headroom looks comfortable: £600m of facilities with £287.0m undrawn at year end. Average interest on debt (ex-IFRS 16) was 6.3%, and guidance for FY26 underlying interest is around £21m.

The Board proposes a 7.7p final dividend, taking the year’s total to 11.3p (+2.7%). In my view, raising the dividend while profitability falls signals confidence in steady cash conversion and the medium-term plan – but it does leave less room to delever quickly if trading softens.

Strategy for FY26: a back-to-core plan with chicken front and centre

Management is focusing on four priorities in 2026: grow revenue through the core, grow the addressable market, accelerate digital and drive operational efficiency.

CHICK ‘N’ DIP rollout and loyalty

• CHICK ‘N’ DIP launched nationally on 9 February 2026 after a strong trial. It’s fulfilled through existing kitchens and delivery – low incremental capex and operationally complementary.
• Trial data suggests the chicken range is largely additive: over 80% of CHICK ‘N’ DIP orders were placed alongside pizza, supporting basket size and frequency.
• The loyalty programme has moved to a second-phase trial with around 3 million customers invited, showing order uplift across all frequency cohorts. Full rollout plans are “to follow”.

Digital and delivery performance

• About 8 million customers now use the app, representing roughly 75% of all digital orders. The data flywheel is a clear focus: richer insight, more targeted offers, better upsell.
• Delivery times improved to 24.3 minutes (2024: 24.5 minutes) – still a meaningful edge in a convenience-led category.
• Aggregator reach continues to expand via Just Eat and Uber Eats, adding incremental demand.

Supply Chain Centre 5 and automation

• The new Avonmouth Supply Chain Centre is due to start operating in H1 2026, adding capacity for 1,000 deliveries a week and shortening distribution legs.
• Automation projects are underway across de-boxing, storage and picking, and dough production robotics – the aim is to offset inflationary pressure and support margins over time.
• FY26 capex is guided to around £35m, primarily to complete SCC5 and progress automation.

Market share and estate: gaining ground despite headwinds

DPG continued to gain share in 2025. Its takeaway market share improved by 0.3 percentage points to 7.3%, and its UK pizza takeaway share rose 7.5 percentage points to 52.6%. Store openings of 31 were “slightly ahead” of revised expectations, and the estate stood at 1,399 stores at year end.

Ireland remains a structural growth opportunity: Domino’s is the number one pizza delivery brand, with over 100 potential white space stores, a 79k population per store versus 53k in England, and a national supply chain already in place. DPG lifted its stake in Victa DP to 70% in March 2025 and to 80% post year end (30 January 2026) for £4.0m.

Guidance and what to watch in 2026

• Underlying EBITDA is “tracking in line” with current market expectations.
• New store openings expected to be similar to 2025.
• Technical guidance: D&A in the mid-twenties £millions, underlying interest around £21m, effective tax rate about 25%, and capex circa £35m.
• Christmas momentum continued into the first nine weeks of 2026.

My take for investors: the good, the bad, the watchouts

Positives

• Cash generation held up well – £84.6m free cash flow before non-underlying items backs the 11.3p dividend and investment in the network.
• Clear strategy centred on the core with tangible levers: CHICK ‘N’ DIP, loyalty, digital personalisation and supply chain automation.
• Market share gains and faster delivery times underpin brand strength.

Negatives

• Underlying EBITDA decline reflects supply chain margin pressure and softer orders, especially in H2 delivery – the core profit engine needs stabilising.
• Non-underlying hits, notably the £10.4m Shorecal impairment, highlight the risks of Ireland’s structural labour changes.
• Leverage at 2.26x is within range but toward the top, limiting optionality if trading weakens.

What matters next

• Evidence that CHICK ‘N’ DIP and loyalty trials drive sustained basket size and frequency, not just launch pops.
• Proof that SCC5 and automation can ease cost inflation and rebuild supply chain EBITDA through 2026.
• Order trajectory in delivery versus collection as the consumer backdrop remains challenging.

Overall, this is a mixed but steady set: modest top-line growth, profit pressure that is explainable, and strong cash generation funding a rising dividend. If execution on the 2026 priorities lands – particularly chicken, loyalty and the supply chain efficiency push – there is a credible path to rebuilding earnings while protecting cash returns.