Domino’s Pizza Group has reported that its like-for-like sales increased during the 13 weeks to 23 September despite planning challenges slowing its opening of new stores during the period and said it was on track to meet City consensus earnings for the full year. Like-for-like sales for the period increased 3.7% (2011: 4.1%), while the equivalent figure in Euros for the Republic of Ireland was down 2.1% (2011: down 4.1%). System sales for the period were up by 7.9% to £136.4m (2011: £127m), with year to date system sales up by 10% to £424.1m (2011: £385.4m). Year to date, UK like-for-like sales have risen by 5.1% (2011: 3.6%) and in the Republic of Ireland they are up by 1.2% in Euros (2011: down 5.6%). Total online sales for the period rose by 39.3% to £62.8m (2011: £44.8m) and have reached £184.9m for the year to date (2011: £129.9m). Within this figure, mobile sales continue increased by 46.9%, and now account for 18.5% of total online sales. E-commerce accounted for 58.4% of the group’s UK delivered sales (2011: 46.5%) in the 13-week period. During the period, Domino's opened 11 new stores in the UK, Republic of Ireland and Germany (2011: 15), taking the total opened so far this year to 34 (2011: 37). It said that despite the challenges it remained on track to reach a target of 60 new stores in the UK and 12 in Germany by the end of the financial year. During the period, it closed one store – its first trial concept site a supermarket in a Tesco in Dudley (2011: one). At the period end, Domino's had a total of 748 stores in the UK and Republic of Ireland (2011: 698) and 10 in Germany (2011: four). The group said it had now completed the acquisition of the business and assets of Domino's Switzerland, adding 12 stores to the group's portfolio and the exclusive rights to develop the market in Switzerland, Liechtenstein and Luxembourg. At the same time, it obtained the option to acquire Austria as a franchise territory and this option runs until the end of 2014. It said that its German business continued to progress well and it was confident that these new markets would be an additional engine for growth in future years. The group will move to its new German head office operation from Berlin to Dusseldorf before the year end, as well as opening a new commissary to service this expanding market - its fourth commissary in total. Lance Batchelor, chief executive, said: “I am pleased to report that Q3 has been another period of growth for Domino’s. Our franchisees continue to show demonstrable enthusiasm and commitment to drive the business forward, even in a challenging economic climate. We continue to set ourselves ambitious targets but believe that a great product, supported by exemplary customer service and innovative marketing will deliver strong growth in the years to come. “We approach the fourth quarter, traditionally our strongest trading period, with continued optimism and determination. We have exciting marketing initiatives in place across our markets and we are confident of meeting City consensus earnings for the full year.” Analyst reaction Douglas Jack at Numis said: “We are holding our forecasts, but good upgrade potential remains: we believe LFL sales and margins are continuing to grow strongly, whereas H2 forecasts assume 1% LFL sales growth and 85bps margin decline; and a heavy Q4-weighting in this year’s advertising spend should now boost LFL sales. “UK LFL sales are up 5.1% (H1 5.2%; Q3 3.7%). The limited change since H1 reflects Q3 being the quietest quarter of the year. In Q3, advertising spend was down c.40% on Q3 2011 due to the prior year’s high profile launches of Stuffed Crust and the Gourmet Pizza range (via the sponsorship of Red or Black). New products are still generating almost 20% of sales, helped by the recent success of the new Mexican range. “Domino’s is in a strong position to generate attractive growth over the long-term with: market dominance in the UK; highly profitable franchisees; and a strong expansion pipeline (paid for by franchisees) in the UK and Europe; to drive up system sales over a relatively fixed cost base. Following a strong run in the shares, we are moving our recommendation to Add, from Buy.”