* LFL sales up 4.2 percent in quarter to end March
* UK LFL sales up 5.5 percent, Ireland down 10.5 percent
* Says conditions continued to deteriorate in Ireland
* Remains confident of further strong growth this year
* Shares down 8 percent
(Recasts, adds analyst comment, shares)
By Matt Scuffham
LONDON, March 30 (Reuters) - Britain's biggest pizza delivery firm Domino's Pizza UK & IRL Plc reported a slowdown in sales growth, hit by a slump in trade in Ireland, sending its shares down 10 percent on Wednesday.
The company, which operates the British and Irish franchises of the global delivery brand, said sales at its 608 shops open more than a year grew by 4.2 percent in the 13 weeks to March 30, compared with a 4.7 percent increase in the first 7 weeks.
Domino's, which operates 672 shops in Britain and Ireland on a franchise basis, said its overall performance had been dragged down by falling sales in Ireland where an EU bailout, record austerity measures and a prolonged downturn have severely hit consumer confidence.
"The company's total like-for-like figure is increasingly affected by the performance of the Republic of Ireland stores where trading conditions have continued to deteriorate," Domino's, which has 48 shops in Ireland, said in a statement.
Sales at shops in the UK open more than a year grew by 5.5 percent during the period, with sales at shops in Ireland open for more than a year dropping by 10.5 percent.
Shares in Domino's, which have lost a quarter of their value since January having trebled in value over the previous two years, were down 8.3 percent to 408.9 pence at 0920 GMT, having earlier been as low as 394.9 pence.
"A check in like-for-like sales growth has been exacerbated by negatives in Ireland and the VAT increase," said Peel Hunt analyst Paul Hickman, who downgraded the stock to hold from buy.
"We still regard Domino's as an iconic marketing story which has years of outperformance in front of it but with stronger comps to come in Q2, we believe the shares are likely to settle closer to current than previous levels," he added.
Domino's had benefited through the economic downturn from customers staying in and ordering takeaways rather than going out to eat in restaurants. Offers such as "Two for Tuesday", a buy-one-get-one-free deal, had proved particularly attractive to cash-strapped consumers.
However, it is facing tougher year-on-year comparatives as it overlaps double-digit sales growth last year coinciding with the introduction of "Two for Tuesday" last Spring.
"We are up against some very challenging comparatives for the rest of the year, especially in the second quarter," Chief Executive Chris Moore said.
"However, with the management team that is in place, the ideas flowing through the business, new sites in the pipeline and our ever improving operational gearing, the business is well placed for further strong growth this year."
Market expectations for full year pretax profit currently range between 41.5 million and 44.4 million pounds, with the average at 42.9 million, according to a Thomson Reuters I/B/E/S poll of 13 analysts. (Reporting by Matt Scuffham; Editing by Rhys Jones and Hans Peters) ($1=.6257 Pound)