Pizza firm DP Eurasia says Russian business sustainable as group sales jump

By Federica Mileo and Diana Mandia

(Reuters) – DP Eurasia, which runs the Domino’s Pizza brand in Turkey and Russia, said on Thursday its business in Russia remained sustainable despite tensions following Moscow’s invasion of Ukraine, after posting a jump in sales in the first four months of the year.

The group, which runs 184 stores in Russia, its second-biggest market, said in April it would limit further investment in the country but would continue to operate there, while many Western groups including Starbucks and McDonald’s have quit the market.

“It’s still very early to talk about new store openings (in Russia). But … our Russian business is sustainable,” CEO Aslan Saranga told analysts, saying the group had good relationships with its franchisees in the country.

The CEO said in April that half of the group’s stores in Russia were franchised, and even if the company wanted to close them, it could not.

DP Eurasia saw a 1.5% decline in Russian like-for-like sales in the first four months of the year, though Saranga flagged an improvement towards the end of the period with 8% growth last month.

The group said it closed four stores in Russia in January to April as it focused on optimising existing store coverage areas, while opening 12 new stores in Turkey during the same period.

The group still would not provide an outlook for the full year, after it refrained from doing so last month, citing uncertainties over the impact of the war in Ukraine and high inflation in Turkey, which jumped to a two-decade high in April.

It said sales at the group’s own stores and franchise outlets rose to 1.04 billion Turkish lira ($63.4 million) in the first four months of the year, up 36% on a like-for-like basis driven by strong demand in Turkey despite inflation.

($1 = 16.4050 liras)

(Reporting by Diana Mandiá and Federica Mileo; editing by Milla Nissi and David Evans)