Domino‘s Pizza Group PLC: Better than feared, yet core issues remain in place; reiterate UW

Research evidence excerpt

Domino‘s Pizza Group PLC: Better than feared, yet core issues remain in place; reiterate UW

C A Z E N O V E Europe Equity Research

04 August 2026

Domino's Pizza Group PLC Underweight

DOM.L, DOM LN

Better than feared, yet core issues remain in place; Price (03 Aug 26):204p

reiterate UW Price Target (Dec-27):145p

Our Take: Domino’s reported 1H26 earnings ahead of our expectations, with European Food Retail

ACrevenue up 7% y/y and system sales up 6% y/y. Like-for-like sales grew 4.9%, Borja Olcese

supported by 1.6% y/y order growth, partly helped by the recent Chicken launch (34-91) 516-1511

(c. 9% of sales) and the World Cup, we think. While gross profit and operating borja.olcese@jpmorgan.com

profit increased in absolute terms, there was operating deleverage, with margin J.P. Morgan Securities plc

compression through the P&L: gross margin declined 70bps y/y and EBITDA Palak Garg

margin fell 55bps y/y, resulting in net income growth of 1.8% y/y only. Although (91-22) 6157-5102

palak.x2.garg@jpmorgan.com

we lack comparable consensus estimates, we believe the print was better than the J.P. Morgan India Private Limited

market (and we) had been braced for, given supportive trading momentum. That

said, it only partially addresses one of our key concerns – pressured volumes. Even Specialist Sales contact details:

so, it remains too early to call this a sustained turnaround, particularly given the Olivia Petronilho - Specialist Sales -

likely temporary lift from the World Cup and the novelty effect of Chick-N-Dip. European Consumer

(44-20) 3493-3709

For the rest, our thesis remains the same: i) highly saturated pizza market with olivia.b.petronilho@jpmorgan.com

Domino’s already at c53% market share whilst having over-expanded; ii)