(Alliance News) - Analysts on Thursday hailed Domino's Pizza Group PLC's positive start to the year, as it expands its range of chicken and premium thin crust pizzas.

Ahead of its annual general meeting, the master franchise holder in the UK and Ireland for Domino's Pizza Inc said trading in the quarter represented an "encouraging start" to the year.

Shares in the Milton Keynes, England-based company climbed 9.6% to 201.00 pence on Thursday afternoon in London. It led the wider FTSE 250 index, which fell 0.9%.

Domino's Pizza Group said total system sales grew 5.8% in the quarter, with like-for-like growth of 4.5%. Total orders rose by 2.3%, while like-for-like orders were up 0.9%.

AJ Bell analyst Dan Coatsworth said the accelerated growth "is no small achievement" against a backdrop of concern about an over-saturated market.

The company noted its recent launch of "Chick 'N' Dip", its chicken concept designed to capture market share in the booming fried chicken market, saying the new product's initial trading performance has met expectations.

Panmure Liberum analyst Wayne Brown said the rollout of "Chick 'N' Dip" and the launch of the Italianos thin crust pizza range "enhances the customer proposition while broadening the addressable market".

AJ Bell analyst Dan Coatsworth agreed: "A move into chicken has been well received and expansion into thin-crust pizzas looks to be a concerted effort to capture the more premium end of the market."

Looking ahead, Domino's Pizza Group said it does not foresee any supply-related issues, noting that its costs are hedged "well into 2027".

The company added that it expects to meet its earnings expectations for the full-year.

"We have carried the positive momentum seen at the end of 2025 into 2026, with trading performing in line with our expectations" said Chief Executive Nicola Frampton.

Frampton was made permanent CEO at the end of March, having been the interim boss since November.

"As we move through 2026, we remain firmly focused on growing the core business and improving our operational execution for current and future years," added CEO Frampton.

Looking ahead, Panmure Liberum said the full deployment of the loyalty programme, ongoing menu innovation, "more sophisticated" use of customer data, further store openings, efficiency projects and supply chain automation are all "credible sources of incremental value creation".

Panmure Liberum has a 'buy' rating on the stock with a bullish price target of 450.0p.

"On the macro, direct competitors continue to weaken and as the market leader, share gains is a key component of the investment case," Panmure Liberum said.

Peel Hunt noted several tailwinds for the firm in the current financial year, including soft weather comparatives and the upcoming football world cup this summer, with the loyalty programme to follow.

The broker said ongoing momentum in like-for-like sales should help rebuild the valuation.

Peel Hunt has a 'buy' rating on the stock with a 275p target price.

"With an average spend per head of GBP10 (99% of orders are typically bundle deals) and customers being able to source drinks at supermarket prices, the gap in value for money vs the more labour-intensive restaurant sector is continuing to widen," Peel Hunt added.

Looking ahead, analyst Douglas Jack said margins should be helped by improving like-for-like sales, ongoing supply chain automation and the new franchisee agreement entering its second year.

Peel Hunt assumes no share buybacks until 2028, as it estimates the net debt to Ebitda ratio will fall below 2x next year and stay there.

Shore Capital Markets analysts also noted the potential of the loyalty scheme to increase the frequency of orders per customer.

"The second brand ambitions have been parked for now, and we would anticipate use of cash to focus on internal organic investments," Shore Capital added.

Cash was not mentioned in the statement, but Shore Capital said it expects it to be a focus as the year progresses.

Shore Capital has a 'hold' rating on the stock, due to "caution over earnings visibility during a period of ongoing consumer headwinds" as well as the refresh of strategy and a change in management.

"That being said, we have been pleased to see the trading improvements continue into [financial 2026], and we look forward to hearing the priorities of the business, and plans to drive growth over the coming years," Shore Capital added.

AJ Bell analyst Dan Coatsworth added: "The company is building market share and may benefit if less financially robust rivals fall by the wayside in a tough environment for the takeaways sector.

"However, if consumers are forced to cut down on spending, then ordering in food is an obvious place to make savings so new CEO Nicola Frampton needs to keep its prices keen and product offering fresh to keep people clicking on the app."

By Michael Hennessey, Alliance News reporter

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