Barclays downgrades Dominos on slowing app downloads

23rd Feb 2024 09:13

(Sharecast News) - Barclays has cut its rating for the UK-listed shares of American pizza chain Domino's from 'overweight' to 'equal weight', citing concerns about a slowdown in takeaway app downloads.

The bank said that data from competitive intelligence platform Apptopia suggests that Domino's app downloads have fallen in recent months. So, with the company set to meet some tough comparatives with last year, like-for-like sales momentum may begin to ease.

"App penetration rate was an impressive 79% in Q3 23 so the upside from here is less significant," Barclays said in a research note on Friday.

Domino's said in a third-quarter trading update in November that the app now accounts for 45.7% of system sales, an increase of 3.7 percentage points compared with the same period last year, with active app customers having risen 5% over the past six months to 5.6m.

"Upside risks are bullish long-term targets from new CEO at FY23 results on March 12th," Barclays said.

Domino's shares were down 3.6% at 354p by 1006 GMT.