DPZ - Earnings call transcript Q2 2022

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Operator

Good day and thank you for standing by. Welcome to Domino's Pizza Q2 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. hand Goers, over Investor VP to today your Relations. like Ryan to of now the to conference speaker I'd Finance and Please go ahead.

Ryan Goers

us Executive quarter Reddy. of and you Today's Officer, call regarding Dylan, Sandeep morning. commentary XXXX. Weiner; results today from and feature joining Financial Chief the second you, conversation Russell for the Thank of will our Officer, good for Thank Chief

this investor be morning's our our audience, media earnings As those comments a also could I actual all release Both for this call are forecast. call want documents trends applied the to from is website, members to that on statements I and mode. of and our materially today. others everyone the our results in primarily listen-only XX-Q of remind on available in ask to forward-looking or the differ

to refer the factors please SEC. information, in with more the our filings risk For discussed

please of do request many find coverage questions X-K this refer call. your I'll we earnings to In measures the to accommodate referenced morning permits. today's best of as to be to want financial may non-GAAP analysts, time release to on addition, reconciliations our our and as disclosures that

Executive one encourage to turn is is the call one-part we ask Russell With to conference like I'd Officer, for Chief website. Weiner. that, being on you such replay Today's to recorded being this call. As also question and only call webcast via our our over

Russell Weiner

joining this you, Ryan, to Thank morning. you thanks of us and all for

back we to in challenging. expected April, the Ritch quarter As be and I second communicated Allison

inflationary fuel two costs delivery especially market labor COVID from the and We drivers, stimulus a in sales continue difficult with navigate in to addition combined U.S., for pressures, years. prior the to

the the for consistent were that at results Our time. challenges we with outlined quarter

members May, the team of brand business in at with obstacles, had confident overcome with to me stronger XXXX I the and our than Domino's our Back the along However, strategies from we're we into putting rally. last make around and that make franchisees team to my these members and the Due short-term gathered more feel team globe place, we're COVID, of rally. on cancel to X,XXX ever. our and franchisees the strength our path than worldwide

reinforces rally our back it our years. to stakeholders. lie creation global for as our that commitment, growth one was So our lot can the best first on with and We inspiring truly meaningful passion time drive and in belief energy, happy to was that goals this The for together my best brand that commit is at practices, Domino's this year's of four and team assure a share time will the displayed performance. days nobody used you confidence continue at all recent I value ahead.

we assembled However, factors current I proactively have our mitigate team the external tremendous that we work those leverage to confidence and pressures some current have the of our in impact of control. address negative can't that to successes,

our doing focus the make brand. and many for our proven approach. well from over This see is right customers, will always, verdict As and this decisions has to we our reason stakeholders we'll franchisees don't on discipline our any approach served and I what years

of with and high the we and I objectives. we ourselves meeting Sandeep? what strategies the to the plans specific those results We can the plan for our business Sandeep after expectations Reddy we have for walk more and exceeding quarter. achieve have for you often will accountable through on CFO, hold provide

Sandeep Reddy

and Thank you, on everyone good to Russell, the call. morning

my Domino's Before profitability. our first to observations see initial share full improve I I get long-term to the as my into quarter, opportunities some details the wanted quarter, I of CFO. of exciting after some

United further important system was States, optimize we average U.S. second while to to our that continue price across increase nearly in highlight to the realize the options it quarter we consumer is in architecture X%. explore First, our the pricing

pulled We many successfully pricing. including pricing have levers, our standard menu

Our This both us helped national cost some are the offers the we to we incurring of continue our and terrific in value our market offers, deliver has also increases and cover delivery food local labor fees. consumers. our basket ensuring to while

work value to opportunities product our while on continues compelling Our with for right a pricing more keeping our pursue. proposition consumers,

Second, We as ensure in QX to year-over-year We operating in consistently need income continue points structure, [ph] sequential we improvement XXX to that in seek expenses. grow faster our the the contraction saw points XXX efficiencies basis cost of revenues exist QX. to in a from basis than strength.

the Third, as improvement demand. increase minus are sales sequential in same-store QX minus We to to in QX. U.S. the realized capacity we a meet a in from actions X.X% taking of our declines result to X.X%

impact grew XX.X% retail Now growth, our the results in quarter excluding excluding negative more lapping X% the decreased sales XXXX. store retail FX momentum financial quarters in of growth global sales detail. currency, When to sales X.X% sustained foreign over as for full positive global compared retail the to Global QX QX XXXX. XXXX, trading due QX in

as XXXX is the have instructive and it believe will our sales we as to understanding it a remains in in do we of useful business stack past, as to the believe anchored across the cumulative long so business, we back performance. continue pre-COVID As look for discussed at to baseline

prior are up year declined at XX% almost retail year sales international over and up X.X% increase to excluding relative global sales increase of growth, Looking X.X% currency our and Breaking three-year the a total sales basis on XXXX. relative negative currency XXXX. sales, stack retail QX the are down U.S. excluding almost X.X% rolling three-year over versus impact foreign impact to QX retail three-year stack XXXX. of rolling retail prior a nearly XX% basis stack, a a grew global XX% of foreign grew XXXX on XX.X%

to Turning comps.

on XX.X% rolling X.X%, year a a Order growth international stack of XXXX. continued the During declines QX, slightly was three-year demonstrating quarter, to impact prior basis relative XX% currency foreign over business increase same-store sales global during positive up were excluding our for demand. and

and year a XX.X% for on year-over-year in declined comp the relative a the up comp franchise hours The quarter counts both year. our XXXX, a actions about tough versus compared a trend by XXXX impact. The This over business left as driven ticket retail operational pricing our driven in on reduced XXXX call. unfavorable for sales ticket from counts, and percentage QX the partially U.S. nearly continue growth We rolling decline across of to will was the stack the slightly in by stack impact the sales. in impact representing order negative without our franchise X.X% basis. our rest a declines from basis challenges same-store XXXX relief saw the prior operational growth the improvement certain later to continue in resulted fortressing VAT stores substantial order service three-year franchise our in X.X down UK, continues in system. earlier. on will company-owned store our quarter, same-store impact the of spoke Breaking was trend a company-owned offset which of challenging address basis for by on were sales X.X% a market rates by lower in percentage business points as estimated company-owned U.S. this customer This stimulus and by years. Russell by more down The in three-year X.X% driven sequential quarter and top by in had this many ticket similar to comps U.S. by XX.X% a more of was count. by in and largest stores stack COVID QX company-owned X.X international partially year relief VAT of the in driven international which line of be decline Same-store challenges decline fuel down base decline to shortened in three prior from which stores, such grows. positive growth, with a along X.X%. was impact a I stores be increase impacts We were store offset exploration performance the offset included the growth the U.S. the while as than stores in will and comp, exploration X% of UK that year-over-year the to while to order we difference in a sales VAT believe our with continued UK environment, pressured The U.S. was the our staffing point during However,

for the to staffing. previously instructive a our on of we believe staffed impact based the store, U.S. sense give As into quintiles stores staffing shared, break have is to relative it a fully to levels, of magnitude we

the ability those in the showing quintiles the are same-store Looking that point X XX% staffed average are essentially stores is significant improvement QX XX% quintile percentage in at Stores sequentially fully QX most points. This in those bottom consumer percentage facing gap meet on bottom by the we and saw between XX demand. labor to the shortages top down sales. in lower that from store’s top the outperformed

few based quintiles XXXX. staffing positive year The with carryout XXXX. business relative Carryout a the the between thoughts remain strong three specifically compared Carryout cost carryout XX.X% on was the QX highlighting QX serve Now to small share versus XX% delivery a up lower quarter levels same-store to the our QX I’ll consumer were The sales orders. both Delivery about businesses. and same-store bottom gap during top in demand and U.S. On and strong basis, sales to

continued momentum, giving significant are larger carryout a to business of carryout for in declined by relative Delivery XX.X% pleased growth runway as The We incredibly delivery be sales to future. same-store QSR much a more segment the with our considering QX XXXX. QX us pressured, especially

gap Delivery Looking between look to X% delivery same-store stores levels. in the bottom in quintiles relative difference percentage continue three in sales in XX% business the We sales XXXX the more a we more same-store see XX remain an performance. stack, at delivery QX those same to XX%. the point QX saw and business, When above we top at the a on than pronounced

X%, in a to from top stores unit U.S. quarter. XX XX this does percentage gap of the count. we stores significant observed economics, new of in the first plus X,XXX an of net we at XX to store long-term rest supply unit a openings our in in conviction formal strong bringing year the the gap or added count see the runway to franchisees to pace during the store current our we of remain closures of system subside, While United continue sequential store Shifting continued our for growth performance the can store consisting bottom on and the from market QX, U.S. growth potential and decelerate maintain some States quarter. inflationary represent U.S. With may and improvement quarter headwinds. The two headwinds be end U.S. and We between that we and our staffing slightly the the bullish the point quintiles, four the X,XXX given until the the development, Domino’s. chain,

our of with growth, Our net growth international store growth outlook net quarter fall trading X% This and range store year comprised X%. within of in stores to global closures. International store current U.S. our When three new added to brought rate QX two XXX in continues X%. openings quarter combined four store XX net our business our to to XXX X% of nearly four

quarter Total income. prior XX.X% increased from resulting to stores. operating revenues by for chain pricing and basket revenues approximately higher revenues second supply $XX.X driven X.X% the higher million the a from market to quarter or Turning

$X.X QX. The is in increase on approximately chain rates exchange basket currency XX% international by in pricing basis revenues company-owned offset in up declines now. during negatively revenues a revenues. royalty by three Changes market our impacted was Our supply stores partially foreign year million

partially cost quarter, consolidated income points These decreased basket and of as were by pricing a XXX driven and operating QX revenues to from G&A by offset leverage. impacts percentage increases. the XX.X% labor in basis actions primarily Our prior food by

foreign in our $X.XX $X.XX. in transaction adjusted us to XXXX the exchange EPS, by decrease $X.XX Our the impacted diluted recapitalization or operating in in diluted for our down the $X.XX $X.XX results versus when compared impacted year. impact Changes of our rates negatively by us QX Breaking in QX EPS diluted adjusted was prior negatively currency $X.XX. EPS $X.XX the as

by by lower share Higher by changes by effective higher repurchases a $X.XX, interest impacted benefited driven Higher impacted count compensation. negatively impact tax rate depreciation XX of stock driven us of months and us by trading by share $X.XX. dilutive impacted $X.XX us negatively tax $X.XX Our was cents. which over us $X.XX expense price in negatively net the

headwinds, cash sizable operating to continued faced free we flow. generate we Although

free cash of an During of working we of point we approximately of net from our approximately operating which our technology deducting XXXX, generated changes $XX such net decreased cash flow of in lower capital $XXX Free as sale initiatives, two income. timing the two million. After $XXX generated the investments million by a the million, quarters the provided of our million. quarters investments of receipt and supply in system liabilities capital as recruit first in flow approximately in XXXX, and cash first expenditures result of for primarily activities due payments to and and accounts centers, receivable included chain $XXX next-generation

at an price the we During retired $XXX repurchased share. XXX,XXX approximately million and $XX per average of for quarter shares

QX, current of $XXX share for we approximately repurchases. authorization end the under of board had million our remaining As

like overall continue we $XX for wheat $XX the we joining and currency we foreign the provided we U.S. see Based prices, environment, in range continuously for resulting compared are of the including exchange million now million increase to close, XXXX. the as were April Russell. environment. we to and commodity We on costs, in XX% you were XXXX. from expecting April. to increase basket to risk XXXX in to update all turn now back currency in I food in have I on impact today, Before evolving the XX% XX% guidance rates increase from to $XX from now we fluctuations and it million resulting in geopolitical rates macroeconomic the to call Changes expecting from expected impact to within An levels foreign the Thank fuel the anticipate will the would our system a to macroeconomic see and store that exchange to million to to compared will expect and April. negative $XX XX%

Russell Weiner

Thank move start you, comps government ease and slow throughout quarter further a were as distributed I'm performance started two my the These year business. during comments as going basis. The Sandeep. XXXX. the quarter away to payments on fueled – we the with the we U.S. March one of dynamics lapping from

During carryout week. promotions, continued another for with ways the a the where within our engage our carryout $X tips to quarter, order we rewarded with our good of we carryout innovative consumers next customers through tip the purchase

popular launched our streaming. created also which ordering and Mind – the into stranger ordering of a fun things, We for one app, TV on experience most the new season shows of

In addition, second delivery evolved offers $X.XX mix-and-match. customers for our quarter, our carryout we $X.XX marked to include for and mix-and-match the national quarter full since first

additional back constraints to provide core demand, of the On call bringing to of some to the last call, actions. time color and to we’re promotions. to those suite I action plans some take customers meet laid that like on taking including returning these hours, out utilizing I'd the ease stores each centers in

flex the had hours of Omicron stores of and because recall the of you have the many If challenges their from year. constraint to the necessity, operations labor early surge staffing in out

when we U.S. the cumulatively we across almost up the operating hours, added business. During estimate the the equivalent all six closed entire first stores days lost the quarter, of

less than during closed over on primarily During stores closed number the service as the as a total the in last quarter, of little all year-over-year a metric to our make of percentage while we hours disruptions flexing returns the number core orders of we could driver second days non-peak year, this of on as lap of this meaningful stores days. quarter from start the will a to impact The be days sales continue the franchisees a hours performance. four The and become of improved full to progress of times. less

Another call phones, in worry the store. members some about having to making centers allows to key were and team orders. answering the is action stores times of the focus XX% centers take our At end around This call without utilizing busiest capacity. utilizing quarter, U.S. to during the in phone pizza delivering of especially on

As a first unanswered result, we lower headwinds during were experienced than quarter. calls from the

action is acquisition cases. summer. back customer you saw, what weeks. Consumer week more of franchisees, was week June, these third promise members We back executing the boost the and our before level ran was high am for our week during to proud team very of end And we as we do two important bringing in a another loyalty our extremely this and boost year. enrollment of than future The evaluate bring first activities would we years early supply and reaction strong in we boost by the planned busiest summer, chain at I

our during quarter. store continue to now the lag performance franchisee Turning corporate corporate performance, second stores to

committed during store. call, system among the corporate position mentioned restoring store's I of we As our to last are leadership the U.S.

operations As place such into with XX-day plan we XX XX, have milestones. and put recovery an

store Now, change we positively to taking role his leadership impact to designed before current that our store our of XXXX have business. corporate corporate report team Garrido, President him. a led also month will who Vice on February Executive in Operations Frank directly made of last

the more needs can and he business. So of this assess closely address

to them system and stores leadership of look our to the We corporate updates U.S. resuming on stores. forward role will of continue progress their among provide our

ongoing Now, finally, like cut. an update market fee delivery to I'd labor provide on our

facing believe demand quintile the and that answers in see labor can many to system. top the meet the our already to outperform We the continue are of We we are that shortages system. our they stores,

of are know We sign many, from where more and continuing delivery for We remains, in can all to than And also during fewer get and includes and evolve fully for evaluate is the shifts with are flexibility. important our up delivery week, Flexibility compensation. our second many we which quintile our work model meeting table. back answered the to bottom in work These key will issues current decades. we short the we've shifts, remain shorter on has lead performance, the this time. The ability top between in performance for fully quarter. to close one our is even the that gap options question over hours question, Until as the utilizing and areas this drivers the improve demand, saw practices. stores it a evolved gap

let's over stores during growth business count displayed as Now order quarter new the The as opening XXX international to strong net growth. international. fundamental turn well positive

quarter, of During least the markets at the XX world. second demand net store demonstrating our the for Domino’s one international opened new around strong

Exchange. term long-term IPO As overlaps from Saudi growth in with Foods, the our in relief franchisees. to comp you our have through snapping with markets growth Opening Other is extremely in we in strong Dash. the our the X, same saw quarters streak and – China the Sandeep the highlight for the Hong international of outstanding negative seen franchisees like mentioned, an markets second for store Saudi pressures that DPC Dash, long consecutive a master congratulate Guatemala. Dash accomplishment Stock four across XX Africa over than quarters its opening India I DPC the Alamar East, the master positive confident potential on East and some go notes. announced sales listing strong especially Kong in Spain, UK franchisee net go including Exchange. running sales a public team Mexico, confident quarters, the A-X the in noted store during markets Stock We business. for in made short Arabia. Also filing I'll now had XXXth few trailing our more to VAT drove it to Middle and of our international and may the remain have I'd Also brands recently Middle growth quarter. master on quarter, their intention growth. an international Turkey XXX as stores by North our

our We delivery around in have the businesses. U.S. long world for and runaway our in carryout both a the growth and

our some will minimize and and control now completely We with steps proactively to control to take their external confront We happy factors. mitigate questions. continue within take to challenges to impact. can't plans strategies We're

Operator

ahead. Instructions] [Operator sir. Bittner comes you, from line go Please question first Our of Thank Brian Oppenheimer. the from

Brian Bittner

sales Thank on basis morning. same in XXX U.S., accelerated second points you said you. by Good as over sales in same store quarter, Question the first. the the your store

underlying quarter when in we look this you three The Thanks. how of this Can it much first maybe so so understand detail the drivers just the improvement understand of staffing the quarter improvement improved this us little year improvement bit improvement and improvement, stack sources versus came help in clearly through maybe, a quarter. in basis, can the we of other just second levels from more of unpack a some the quarter? at meaningful on a health

Russell Weiner

answers are acceleration a from just it Brian. we in actually is Thanks I'll the you for carryout went of bit in morning, And a split where lot we second the business, increase question. for prepared to Good XX.X% through, because think sure but quarter the it the I quarter. for the some on increase that first really really a went remarks the try up of to little in XX% sequential

impacted saw and strength from business, three-year to XX% in XX%, definitely went on exciting. very that we the momentum basis. We stack significant So acceleration carryout that so

on We quarter. delivery the you in look happened year. what business were overlap I at more against up think last if the significant much

decline quarter. were that stack XX.X% compared we three-year on plus a X% So even had we to X% though last up the basis had

so last playing the about sequentially, call earnings on of lot initiatives we in improve a that started did the And and sequentially. delivery talked

we saw improvement and that sequential that so the points more progress. another have making some definitely to in with but by the both delivery do, XXX both of said we had driven carryout basis meaningful We way work quarter, progress was

Operator

of Thank go comes the line David you. question And from our Palmer ahead. Please from next ISI. Evercore

David Palmer

Thanks.

how look drag options numbers you're the experiencing does you that right relatably things what that does here, is like regard describes any service phase and are business? I I part And and that that wonder test mentioned you're then two like? this some what about a being customer to the Thanks so in maybe a that sounds just customer you in mean, could First on measure you impact sense, the what with evaluating things pressure now? at labor other much. most alleviate to it still of to the the in delivery that point? evaluation Maybe an issues talk

Russell Weiner

Sure. Thanks and morning. good

is second is service serve answers On the question better the is sequentially things need at ability we're to and over to available that do. to be, where the customer what of issues you have To the we to We evaluation, demand like until capacity our but we responsibility some what dealing the at though ourselves. tell to side on options get that's things the of day, capacity first to the and XXX% really capacity done the quarter. all getting gotten still end understand are we're in have end the second we we quarter certainly and this in your getting what I is of the our committed with, the think is better. the We within strong day, lie system going

Operator

question from our of next Please you. comes Thank Baird. from David And go line the sir, ahead. Tarantino

David Tarantino

very the given I secondly then you guess big the on update great that guess, in versus occasions? there? an the morning. was you a in I at question the think carryout if you've that Thanks. some are good And you delivery this carryout or could business. if If on on least customers us I second offer you could maybe just of offer businesses in sales carryout seen or the promotion mix business, is Hi, new changes the give business, first, whether it today, And on wondering layer quarter you sustainability saw the was impressive. of the with thoughts that durable of strength that a you I'm a had what new the think with more

Sandeep Reddy

good that's the for one. question really David Thanks,

that in we'll parts, talk take piece, it two I cover think and delivery – the Russell carryout you about. will now there's second about versus asked dynamics the the let's

delivery a actually each mix standpoint, shifting delivery I will at at only declining. comps towards are we the a the business because that further things end on the give We it's trend around year because And is a the at we look in what space. bit. end overall, of So is think prepared I thrilled from acceleration an are out larger a in with a we comps the carryout But mix you carryout. a accelerating carryout QSR are when carryout we the on of carry moving quite business, really momentum remarks business the in The year. said mix, think the significantly versus typically the was update update clearly about as is and the

about Russell, business. a want So there's that And us lot do talk sustainability? of you runway the for on to for growth then

Russell Weiner

David. Thanks Yeah.

continuing in that decade years, to on not just three focusing the or sustainability so, since area. We last have and but really and growth over last momentum carryout we seen convenient decided over

overlap important Interestingly XX% between lesser very so sourcing occasions. for carryout from delivery see on of so enough, have basis and incremental buy-in so One of the reasons QSR. is, that's or to pizza carryout maybe from We we occasions other a delivery. percentage is the and us it's more

segment. enables carryout pizza only So not carryout QSR but segment, the in grow the larger to us larger

Operator

I And from comes Deutsche with next from your Bank. our line Thank you. question. Brian of question Mullan show Please proceed the

Brian Mullan

Hey, you. thank

to related question development. domestic Just

or pipeline growth pace to Do to to factors rate. are the for for year? What you that up a back longer domestic little As consider path next it's the XXXX, the is of XX now? think to to to the kind pre-COVID rate you your in of gating in what pace factors in a investors about can right are view? that get little back X% bit think growth most a going regards be important And you if restoring of the right run this now longer, key to

Sandeep Reddy

for So question. Brian, the thanks

and the momentum on QSR Russell when into I are in the penetrate potential, seeing U.S. and important at carryout there space and we we really think of have the has actually how I acceleration that we think something the terms the opportunities that we that. touched can look with

talked So go back actually stores that then already. to our relative X,XXX I'm to stores as about to we've X,XXX for previously the is what going U.S. goal of

that to headwinds before these of all environment, I the from And meeting see we even franchisees, factor. can supply potential I doesn't not compelling. subside, a we payback. because last as potential from see in trajectory some think think the of chain subside our that but where some to this, And talked short we've the of see these we profitability. call growth. year industry of at Their very is average on this though they of probably space months the to mentioned And fishery years And So XX really future returns fantastic terms going part change problems, on itself, et be beginning, terms long just can term have were we the in about This X%, think they cash three trailing are They cash of take accelerate. gap term, I headwinds we deceleration Rich basically we the a the to headwinds relative the development until are I the think cetera. continues need of to massive. in

we that really business focusing runway on carryout saying the confident So have that very in actually, without of objective and momentum achievable X,XXX us actually lot unit gives strategy, that is definitely especially are are if development. and in more terms of a for we we upside the upside that the

Operator

question of show comes go ahead. you. line Thank I from next Stanley. Glass our Please question – John next Morgan And our the from

John Glass

run toward signal the a still with? what a to boost too constraints would demand quarter, Why did I had time week – mean, customers. that was I end much and I think very the capacity just risk that getting were you during when of you of Hi, much. mean, you already when [indiscernible] you still? a better? constraints driver deal Was maybe thanks would that have disappointment

Russell Weiner

for it the was just was year want to week that biggest question in and that think John it side, success the biggest us on week the history. I carryout boost for I the also for our reiterate of week,

just about ready. about the carryout a and job it's incredible we franchisees And prepare gave enough have an our supply chain so business, and were delivery did enough We about you and business the doing we boost there. also to time business them thing. this it's we best week, it the think for when not in time Look, the

they're think bottom our difference making talked that and we're It things right. decline Sandeep also sequential top the the the of that doing, improving, quintile. between showing some I is staff in about we're

this think could didn't great done I a think our have we And So we system it. job. we wouldn't handle if did

John Glass

you. Thank

Operator

next you. Thank Please John ahead. Stanley[ph]. Morgan comes And from go of Ivankoe I show our question the line from

John Ivankoe

Morgan. JP from you thank Hi,

something than often soft guess, I with remarks on XX that give clarify international negative higher tick Thanks. a you're that XX less development second for can to XX U.S., indicator next a or sales, think international, so the down thousand do stores I XX your Should heard that, the months know I of comps willing in quarter same I you or in you very similar last to mean, I this if the hit the then U.S. in of same development. see, you prepared what heard the just be secondly, for guess especially next the to I the we leading that? that guidance previous you months. months. would expect the relative and Could months store

Sandeep Reddy

the Thanks John for question.

was, prepared headwind. on the of did the the as through expect year So the to as long slowing months here growth, definitely we balance unit we I and see XX down the of think a what yes, see trailing you remarks

headwinds XX it's But very, by if subside. the the excited we super the it, quarter in very say look for but include, we're was been at months, And think unpack and VAT really it international and international the business, a because said until trailing basically division. fact, is think UK didn't plus positive in comp growth. I you overlaps. I And you if XX we And months driven impact this that's you a solid. So it's X% the

look so that. international. stacks And healthy. would very And with are what I at very It's XX%, the we confident three-year say on is

that sounds global And that provided the comfortable the X%. I very no strong average we footprint And see to deliver we comps, to are across so all change. we growth with X% very development. demonstrated X% on we've and That been that with range the these think of able for international we've unit to at reason

Russell Weiner

Yes, on context I development think side. a little to add to Sandeep’s points, just the

proud system. just so of I'm First, our

and to five as the and still in net to we're Domino's years leader If stores pizza actual a you that, with far you and as look in leader. numbers, continue industry QSR of percentage, number both a and at industry, back look going these the is be last the

just that while stores need stores also our doing lead think development, do, to to open. the is some in are needs they which current context balancing between what exactly tells the have franchisees need to So is they we I what me and continue there, they capacity but

Unidentified Analyst

you. Thank

Operator

comes you. of Thank & go question Company. show And Cowen line Andrew I Please from our the ahead. next Charles from

Andrew Charles

first, know But XX-Q for end X.XX the when we per was of at items X.XX. higher the an XQ. number from wanted I impressive, that price to XQ Thank guys orders think was of pricing know X% end X% mix to from delivery to out We and up said on points platform the it's I to basis. estimate you an higher at in XQ. follow I that. U.S. in addition very you. sales taken of XQ Thank you a order you basis Back three-year earlier price Great. question, by out and match on for called nearly helpful. called a the accelerated disclosing XXX XQ same-store raised

to the to you can was on and traffic So suggests year on our speak I'm shared that three staffing sequential encouraging from math you that guys some change updates carryout. perhaps a in basis XQ amid curious XQ if perhaps deteriorated flat,

Sandeep Reddy

updates that actually national made any activated all overall, on have changes And so, I in offer pricing. on our unpack part and talked I then fees an there's multiple say option them has delivery A before we offer but pricing, have and as activated the I of in mix local but question that franchisees is well national with the And offer, national lot menu were the levers have which itself we the first the pricing. been A the are to think disposal let's of of There's start pricing, about. the I'd pricing their time, would franchisees. at think and match that quarter. the been one think is with something that

those quarter it's have both first pricing of elements not into all would effectively, second national the gone So in is whether and the just quarter pricing.

in about So that the second the average of quarter. X% all of was

I thing would from one away that's take that. So actually

though, I to helping accelerate of the reflected and the are seeing we delivery that why we the And the of same-store sequentially saw we from more significantly the so we I with to ticket What a sequential on address to us. And the we and quarter and end at the count And when issues standpoint, when both at the was definitely at count. we look count made. those. ticket we sales the we was because serve the look I these are up business the down. quarter. in And that to saw declines think actually X.X% the really happy in you think as delivery in we pricing are Even had it's think capacity order order was order as then well that's that offsetting we saw pressure I second the point combination order acceleration coming taking are actions very we when the it's the think count I look the pressure versus side. through overall that faced, offset, ticket on clear minus headwinds, that because did terms demand in And had

with I we the we're talking have subsequent on seeing, but think what all. go information through happy about quarters, all we’re we'll So as the drivers more that

Andrew Charles

you. Thank

Operator

from next And I Please ahead. Jared of our go you. Garber Thank question comes show from Goldman the Sachs. line

Jared Garber

follow-up, and delivery is accessible consumers Thanks historically that a delivery focus headwinds little maybe into back opportunity, annually to frame continued unit then what the I kind it's going morning. we how carryout but think site bit the understand changing of is the XXXX several years versus of franchisees, we to there's business, just development wanted for it's like maybe confidence or more couple main about, times, talked gives the I the that in doesn't with that need you the base you Thanks. to asked U.S. been XXXX timeframe going ago of a demand Even question. growth to just to pace so, necessarily commentary. know change revisit if forward. think of to the timeframe, greater has the what growth way given terms unit business from reaccelerate, a can you maybe help franchisees. decelerate. XXXX of us drive can the back some as a certainly I but look the a Good pipeline carryout as are we to may that location, as to making main one looks And a discussions be those about look if that

Sandeep Reddy

significant two question. thanks that. pretty Jared, for the components So There's in

addition a the – a one and market acceleration penetrate time market delivery The first, we one a last earlier which because in two on second start in business, the I'm the a is delivery momentum three to as from are and new I is businesses. The What Russell the encouraging us. because told go a very business. So like able business think I and for to standpoint, answers the much carryout with it talked think delivered let me to of larger delivery carryout carryout is previous very separate going significant we to Russell well. in seeing are business pizzas are significantly about by us business, basically

So in that. a position strong we very have

that more versus both all carryout between in businesses. a doing and development development on incremental gives fulfilled of no business. but and of in continues They're should trade and work carryout the we the the in is delivery. be on actually the we are two before, box this thesis strong. we're unit terms runway delivery there The based business the that was the terms is So If businesses way, from have unit separate doing very what anything, potential to this be to us being even delivery

that's growth in puts there's are on over U.S. the going a takes and deceleration of happening, and been So unit that terms few there.

the the basically States, I think Hawaii ago, – year United out picked States more was it's And out of had that, think it's the range, seeing flourish months pre-pandemic. of of economic trailing some I X%. it including the chain, few that's XX States. and three since international is headwinds which of some of the than United of other one reflective a in terms factors, that about reclass supply the the been That into market we the pandemic United been the of But the years started staffing. the in into we've helped

development that delivery reason we we given we can't think about, get we be I gathering once about business along baseline overall, opportunity that to seeing, growth, being drivers steam as an go and business, the carryout normalized seem thesis just being was the unit So these headwinds, what anything. talked to past no there's incremental especially a this get

So that's of information and hopefully give I questions you your answering that. both enough on

Russell Weiner

we still in that have ones those incentive every really is Sandeep, store returns the on still think ones for continue very The on franchisees when a stores look strong build, EBITDA doing is a are are fortress quintile I there strong Yes, at a well, place, store that new to obviously the add, very per I the just would the most. place. the top to our delivery,

perspective, environment your what so constrained your a to labor closer during customers from customers, is And delivery a get getting you helps constrained, when to delivery. you're fortress closer capacity happens

incremental. new of carryout a We volume the volume, is the also know the up majority the of when open carryout store majority you overwhelming

with and to every continue financially and that. in So also ahead helping us incentive go to there's do deal capacity

Jared Garber

Thank you.

Operator

Thank Strelzik from question line of ahead. you. Andrew And Capital next go Markets. comes BMO from I show Please our the

Andrew Strelzik

what in little on Thanks. biggest full your morning. seeing, the a remarks the maybe I bit might opportunities timeline come follow that see wanted the we excuse you of opportunities. are Can quarter, the made P&L? start comments about me, just to up good which question. prepared on efficiency that first you a elaborate taking and Hey, you're Thanks to seeing the for indeed, through lot after to where

Sandeep Reddy

for question. Yes, the Andrew, thanks

And so I are the multifaceted, opportunities think right.

three So I think we components. about different talked

we we where make dealing talked cost the On with. value the and measures architecture the makes at it pricing I really up at about sure are to to consumer price the different one, it's taking that do first think that we sense, the that time, given delivers we but about looking value there, deliver consumer. the same terrific and consumer, it still How

And so we'll that keep on looking at time as goes along.

sequential going decline faster operating to points revenues some see revenues from The from XXX basis second And just in margin QX going than went operating making did standpoint, We than – decline QX. a XXX expenses. points sure faster that in we an improvement. basis are are was,

I see. important making keep that thing as it’s for that year prioritizing that third G&A most as about. is And sure that encouraging on the to guidance the is we doing last near-term that do over we’ve supply we I that it’s that’s actually our and like is opportunities make earlier critical. that. you And we really And growth, lowered continuing in includes years, the serve our think that that to the will about, we actually and very about the are investments areas been invest capacity to technology one chain, quarter. the have But well, progress that. talked see that talked accelerate which what So call. saw talked and to expenses which we’re critical driving Russell to how But that’s demand the we in based some made that on the in about G&A honestly, And prioritization discipline

coming quarters on We continue to in drivers the well. work as similar

progress place. can we to we’ll able get that better So be to I much make much as think on as

Russell Weiner

also on we to, a to delivery on drive. need question the from I answers is Simplification add would operations just we is to the what Essentially that add standpoint. do drive. would I Yes, color need side Sandeep standpoint. your financial what efficiency talk some maybe efficiency, to about

So programs of a think quarter give here. you input parts our jobs. are focused we on of the last about most folks and couple stores about value to talked on the added if we And some in their continue

of with ended For calls taking example, XX%. XX% one our of things store. on this last of quarter We center. stores We call at the out ended those is quarter

sound which our up a of times many that is Our a It one we now store, a which operation are store spoke there about XX of box last within time, project lot. around multiple the a country. And stores them, week. eliminating folding doesn’t actually like in XX% to hours simplification is program adds

on the efficiency capacity, standpoint then the and leads to financial. that to down unlock So operations flows

Unidentified Analyst

Thank very you Great. much.

Operator

line from you. the Dennis Thank our of ahead. I show next UBS. comes question Geiger from Please go

Dennis Geiger

on of Great. to and efforts that you staffing there. a the of Thanks the – provided result your for the of question. Appreciate challenges metrics sort driver lot all a the address as commentary the

if addressing opportunities you think the with look way Is you’re that of if challenges you are wondering guess with what the if address to to And is, Just at other Thank the bit to that those you on situation frame internally, before are where up? the finalized speak kind internally of you really there’s in I question inning up kind could a address frame respect address that? you. internally? challenges? maybe options, the you you plan Is journey to different of driver could to to still sort tinkering or more a

Russell Weiner

know won Yankees, about Dennis, the MVP. don’t my it’s innings, Mr. Stanton I break, although All-Star the

happy we’re there. pretty So,

progress and We our is That our single we capacity with brand to be are way. are to going can work a – every ability fulfil satisfied until fulfil in we order. we are just never coming

stuff always we be to is final as far innings think better. three will So first case, that our internally. in I’m in we do can the we get as say, try We and never concerned because fulfil this priority did

of doing that. lot lot stores franchisees A doing are have We are that. who of a

we to improvements. be until get be, continue and this we committed for to we’re our there all focus explore serve own XXX% us to done options. are need But we customers. able our to where is getting We ourselves will But to big seeing

Dennis Geiger

Yankees. much. Thank you Go very

Operator

next Lauren of I Please from And question ahead. Silberman go the our Suisse. comes from you. line Credit show Thank

Lauren Silberman

Thanks I for boost had one question. the on week. the

run to think I which frequent about end believe and do I one is So you was one another the more talked by early plans in of than the summer, June, historical.

an So cadence you about this of up talk to plays from you trying read boost of last all can demand? couple about understand Just here? more running And do how thinking that not underlying out? catch the see you’re a any promotions the is promotions through, from of there Or years? over week how

Russell Weiner

time. three call you No, Yes. planning we to a at are it we if I look boost mean, four Obviously ran, year. historically weeks one a

And next the see goes. work thought further the And how everyone that so last with or one will we announce franchisees. went want Obviously our happens. one to we well after anything

So at a nothing more time, pizza time. a one at than one just step

Operator

you. the RBC our show Capital I ahead. from Thank And from Chris question Carril comes go next of Markets. Please line

Chris Carril

pricing for Thanks and for the thoughts question. far. detail so the morning. And Hi. on Good thanks

given tell that positioned? pressure well necessary? if Should that you Following those any up lever do can us you power is see you consumer Do more pricing greater you’re as risk pricing Or on thinking though, pricing the there to yourself today? today? earlier you on actions potential comments further pull see how about

Sandeep Reddy

in is there’s And consumer. So itself the think for ties pricing really to value marks, Chris, it’s question. I end fine, talked the a threshold it’s really key it the making which in that prepared about I And us. great in is back sure to the but a about what terrific is

sense to last as continue what we testing’s done the a look, make for consumer process testing. that going on is and shifting sense, to always the on it last And doesn’t what is so keep that’s ensure just quarter. things as And company. on is, And testing volatile when do shifting sense. we continue the way, not inside decade, the the And and by the situation based do to the makes been macroeconomic

there clear decreasing pretty a environment. We’re that cost is definitely

profits of they And look us. perspective. for them and So because we make making that partners our consumer. or years is it’s franchisees a stores making there’s And terrific that a from deliver have the standpoint, and our a a perspective being long-term a the sure with to are from And commitments to to value need balance delivered most franchise their number between sure with decades find paybacks then the on basically profitability from long-term at shared a long-term of been us it journey. able

So we work there’s on – And together think what we I them. thoughtfulness into with to do. continue that will go it

Russell Weiner

help though, to EBITDA, day a want for tickets. add to Dip] where how profitability do much end we inputs is quantitative just I’d to We know The customer? the Yes, done of value balance we correlated go the we’ve how be. Sandeep’s us this decade at also he like optimize [Audio order said, that we testing, do this we to balance optimize as to than those essentially to of us into but over on point more are to balance. counts all And the get

category the to to about to folks will order a is pizza. a right sit are ago. we want you macro out times recession tough, counts. down into years it’s a Domino’s driving from talk where the for middle of about down in started who eat XX switch they back So or maybe at what continue have When me, I environment, when This

as think our we is strong concept, through business we our So times. maybe difficult go more actually

Chris Carril

you. Thank Okay.

Operator

you. Thank

line come Please question proceed your from from of question. last the Mr. with Tower will Citi. Jon Our

Jon Tower

Hello?

Operator

your is open. Tower, line Mr.

Jon Tower

There we go.

Sorry, the there. you a out taking for Yes. appreciate minute question. I cut you

I’m you mean for the question. it’s if brand and or in I the explain I at TV did the then in environment? at or promotion your business time could Stranger check curious and business Things clarification the least differences And say a guess a sales XXXX, really you’ve normalized the and Delivery a Carryout First, that in in clarify question with first what then won’t streaming this businesses. in believe other the anything might but any same-store versus perhaps just quarter, Batman you the I is, since least done

if TV shows persist to if in a or I’m So this curious this future? with something one-off is is know whatever the could that you other or believe

Sandeep Reddy

Yes.

have. So that Jon, I’ll Things go question then the through answer and the clarification on you the definitely Stranger Russell will question question

it. when between were comps standpoint, terms X.X%. ticket. other serve, had the into ticket down in But was components there from higher is relative changes delivery offer It you increase I look think the it down But the a go made fee than what delivery and check trends carryout different would are Carryout XX.X% same-store So obvious is than the say. a tends well of cost the carryout. always pretty delivery minus versus I that a of much and I of is at carryout. delivery of There’s that dynamics sales be we other also pretty few think the a quarter, the XX.X% in higher natural as think that ticket some to to we

you from that. So actually can make conclusion the

Russell Weiner

on Yes. My you I Batman looking day, an amazing I memory. at the Things, box, wow, – pretty have Stranger remember just And first that’s amazing.

the right though, lost At tie what. what in then. with brand the have with And interest because, way of high. is anyone with associated since that’s sure what have what a of the brand it’s or time it or of sports whether that have in if any in, that’s knows a You’re not believe day, really we interestingly laundry end you, nowadays, most don’t And not we movies believe I’m is. getting enough, list we done in a I big –

I lost just the I strong it they that don’t this because a one Stranger don’t a get Things lot. was there. the reasons why of think And and property, we was Netflix, think promotion you so that lot. do particularly And do

powerful. together so and brands And this two without borrowed being when of really so that equities come do brands is itself like and are something strong in

comes see not this, the bottom but paved a can dozen at our And in of us you an this will be again, yes, so, partnership. logo opportunity do like around, a others

Operator

for Thank Russell you. CEO the closing I’d This time, call session. concludes our back turn remarks. this Weiner, At Q&A to like to

Russell Weiner

everybody October our forward joining speaking quarter third discuss much day. the look Hey, thanks results. XXXX with so for Sandeep Have to in and call this morning. you great to a I

Operator

This concludes today’s conference call. Thank you participating. for

now may disconnect. You

Domino's Pizza (DPZ) 21 Jul 222022 Q2 Earnings call transcript