DPZ - Earnings call transcript Q1 2024

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Operator

Thank you for standing by, and welcome to Domino's Pizza's First Quarter 2024 Earnings Conference Call. [Operator Instructions] As a reminder, today's program is being recorded.

And now I'd like to introduce your host for today's program, Mr. Greg Lemenchick, Vice President of Investor Relations. Please go ahead, sir.

Greg Lemenchick

everyone. morning, Good joining call. for for first our Thank us conference quarter you today Today's Executive our followed with call begin will Chief Chief Officer, by Financial Officer, Sandeep Reddy. our Weiner; Russell conclude a will call The Q&A session. with which comments this in website, release both our statements forward-looking call are to today. morning's on our The available apply the and earnings XX-Q, of on also IR Actual our forecast. results or trends could differ materially from

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

find to your on recorded the webcast reconciliations X-K morning morning's In disclosures addition, We accommodate to that referenced and also for many non-GAAP release be conference as please website. this our today's to as want measures financial being questions refer permits. via and is being of time do earnings to best This of replay call may is call. our

to such, the turn call I'd over that, As Russell. With like to

Russell Weiner

Thanks, Greg, everybody. morning, and good

our Hungry growth counts both its all We from profit. benefiting order sales, that carryout strategy offering. demonstrated flowed Our more growth. is through bottom in value for through results strong came to we're drove We in lower stores segment. growth cohorts saw that the on delivering and delivery largest in the are undoubtedly positive our more double-digit performance the the comp income that U.S. QX And our across profit with in that cohorts more U.S. driving and our line promise, income the renowned more

quarter our Hungry pillars. M-O-R-E, our highlight of first for to results through like lens the I'd MORE

focused and in all food have stands the delicious of with more in the food mouthwatering delicious know on our M We that most we for know, marketing channels. you showcasing As industry sales and are photography most food.

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great Hungary This promise for our stands with a is food to for we'll by deliver experience delicious consistently O MORE The driving have products. how our on operational most the in excellence.

our last dough and on on program. we calling shared our in of call, on delicious the out operations, focused we're stores rolled dough, more in sprint, a that earnings In we and X we QX, them. I make our embarked rolling We're series which on training X,XXX-plus products build and As this first all how sprints across focused XXXX out cook product U.S. our new how our service a

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and the Renowned providing Domino's. and in to value R Value discounts us through want renowned see memorable. at that's you renowned that's pillar third mechanic meaningful creates it's in Hungry It's value get than the one, our this to value my means QX expand driver X just was buy orders, I Emergency both that the in get our emergency value Our to the the pizza loyalty drove only increased for it into having innovative 'XX the of on free market, price career, also performed about acquisition any not but MORE what of a members one lowest marketplace. better for pizza. in And renowned QX. not breaks comps [indiscernible] in one free, reinvents is and program. value. about buy

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the these minimum I'm by $X spend the bringing customers made for customers carryout we're So increase fold. possible into point. our earning reduced with new in part particularly pleased in

customers Once and redeeming and they're more members, all than increases delivery are before, seen across channels, of being become ever carryout. our

majority exactly tiers incremental new we customers. combined the program doing are Our XX-point XX and the dollars of franchisees. These And Rewards. in redemptions engaging has now the what redemption Domino's for for hoped. X tiers driven profit They're more

We sales a getting us will So more, profits, and beyond. XXXX in believe driver earned franchisees have for customers are continue be and to Rewards win-win. Domino's more our truly a meaningful

performance National its XXXX, promotions the In renowned way are brought our another time back our and for special value. January first expectations. carryout we're boost exceeded we QX, driving week since

for our want it profitably are franchisees. customers value, Clearly, driving and we

XXXX, Now consistent relates it can in we XXXX. our in to what promotional with to cadence it you expect did be as

can you that, boost X around of weeks. expect part As

renowned commitment are that these boost benefits we're to internationally. tool customer and short- weeks proven As long-term for a reminder, providing the And acquisition both our brand. value drives a seeing same

our getting of right. best Some this markets are performing

boost Mexico campaigns our outstanding run and week in have driven order successful example, sales growth. franchisee master very that has an As

channels into While providing marketplace is our one strategy, through own of is our value renowned tapping aggregator part the other. barbell the

exit the space sales or aggregator at into through year coming on launch of to remains Our more X% track the UberEATS.

on what a seeing. we're has our line insights into a been we're few expectations. I quarter to launch, that want in Now our full Incrementality share with

transactions higher on user seen single a In on of addition, we've than own Uber we're our channels. seeing percentage

Further, prices. more deals to to everyday is promotional. becoming low this Customer are channel than responses stronger

fine-tune are driving to continuing profitable ensuring values our spend channel. work that UberEATS, customers best to our offers we result, are own transactions that and driving the this on a our through for As focused remain We while effectively channels. remain we our marketing on

behind May, of Hungary we by as Domino's MORE rally E Domino's the global best-in-class we system. our life our Everything at franchisees for are our I that wait our is to for worldwide so do Hungary makes Hungry We'll in MORE. For to be for strategy They were MORE enhanced bring gathering our hosting franchisees inspiration franchisees, our in what across strategy. plan can't the where special. for thousands

Domino's I close, Pizza. about to XXXX beyond and excited more So for couldn't be

quarter and Hungry short- clearly against value our for For results Our gives goals and strategy show creation resonating that customers. is MORE shareholders. This our with me great long-term first drive that can deliver we our confidence significant

With that, I'll to turn over Sandeep. things

Sandeep Reddy

Russell, good and Thank everyone. morning, you,

franchise this growth versus so first being track achieve This on our value kept profit target XXXX a far Our for year. to of our pricing model transaction profit XXXX for us be drive demonstrate customers We store financial and we has took XXXX. in franchisees. while powerful profitable for U.S. great our our average we remain resulted at profitable can in to dollar XXXX, when our in XXXX growth. results has U.S. how franchisees quarter The $XXX,XXX smart

and impact global of X.X% the U.S. sales store and foreign currency, to due net retail global grew Excluding comps positive international growth.

currency, grew of foreign sales international sales, excluding retail increased X.X%. X.X% and impact the retail U.S.

During QX, same-store sales a for saw meaningful the X.X%. of increase U.S.

and delivery Our strong comps X.X% in of transaction of carryout primarily X.X% the by driven were quarter for growth.

that in inclusive our loyalty emergency of mentioned remarks, by pizza a his This was results exceeded ran. we carryout boost increase special expectations Russell sales in driven U.S. from continued As benefit was growth transaction and program. that the the from our new same-store from week

pricing also ticket X.X% carryout sales from a delivery. a X.X% partially than lower were of mix from We tailwinds which These a higher offset Uber. carries benefited by mix and

seen is stores the U.S. that X,XXX. count. far of with in everything U.S. are coming X/X our sales so evaluating count much line net in Uber new indicate would added still X.X% expectations, system We our store our from with to But unit to it's Shifting how we XX incremental. the estimate. bringing in have We approximately mix line

foreign to results XXXX. were where impact, counts Store international, increased excluding in quarter. in opened increase first QX Shifting is stores, currency of the X.X% in generally the XXX sales, which over line net our XXX we expectations. an by Same-store with increased

due by lower also the out revenues in sales our food million. as tech increase This from fund at from X.X% a basket primarily gross $X.XXX to QX, to franchise growth of wanted fee higher currency due higher global our rate rate ad the well global decrease increased and X.X% I contribution in lower impact $X.X resulting cost XX.X% as slightly operations benefited of excluding supply in chain foreign margins from being procurement of negative productivity costs. to about Income call was retail QX, of royalty the of and the that delivery X.XX%. margin

be expected catalysts full excluding we following: continue turning more loyalty as shared. sales we year, U.S. Now currency, of X% year. the and plus be above comps the outlook, retail our of previously to in and of guide growth, and global the for to to our or quarter X% or each more the to with X% the XXXX line which the expect in long-term what a result remains comp impact first, in we for foreign expect Uber remainder

on Specific by off, in promotion to Uber. QX as ramp QX, a partially the we slightly basis expect pizza be below a X-year to them emergency offset rolls

inclusive similar that QX You boost of in what now in cadence national behind of is us. terms special ran promotions the a can week our April we to activity, expect carryout

we increase X% Second, and sales overall expecting increases, an to the sales of and to mix as more. the through with Uber are year awareness or throughout marketing year exit

the last guidance X% more at to Third, the back the first year but a comps long-term in continuation remain due year. the saw accelerate of expect half we end of trends international to the in half them soft of the of to year our or to

Now net XXX expect international. we driven to XXX X,XXX U.S. in and stores, be in the which where continue more, to by shifting or will

impact to expect currency. increase or more operating the in X% continue income, We foreign year-over-year excluding of an

unchanged, remain relatively be operating of we some compared which highlight components income the flat to margins to expect XXXX. To

we to leverage making we technology support store future to As in in are XXXX expecting capacity to chain supply are technology, not and consumer the see cost growth investments due a U.S. in reminder, sales

G&A QX takes timing approximately our worldwide by of which expecting years. X.X%. G&A a as every driven rally, This percentage sales million in of inclusive $X is of X are retail our approximately to We in be spend place

to prior the year, to modest expecting Should incorporating food full food are compared rest up year, We chain expectations, roughly margins X% our year of end the of may to pricing be operating the with the for margins. in year to an leverage and supply a of X%. inflationary moved supply the flat basket our basket chain we lower see range for

Thank you.

open We the will questions. now line for

Operator

[Operator Instructions] of Charles TD Our the from Andrew line from comes question first Cowen.

Andrew Charles

Question first same-store on sales.

Just for XQ watermark high we same-store impressive a Should the of Obviously, number. very X.X%. think sales. XXXX is U.S. that as

talked partially pizza of sustaining benefit think sequentially just UberEATS we XXXX? is you the about given though, emergency You QX while about off, But will broadly rolls moderate this remainder curious performance, picks think as if of up. the

Russell Weiner

Hungry more single but Part that deliver as to we can the putting for X% or we're MORE quarter. X% everything the algorithm going is for thanks every is the us and more call. Andrew, our floor, reasoning of part that do beat of for for to out

on X this quarters, at And so at results going the will forward-looking there liked really about things I say I at. what I is I look that I'm and not are get look but I into to look repeatability. quarter

first you like were the quarter. Hungary those first look second had news new okay, drove results, then we We've repeatable. think actually those our MORE of got in the that What components for results strong. the at where product I And is said, And you quarter. in our product year platform, are about say, the when

excellence. operational in pizza about delivered We talked a in delivery QX last We year QX than we more at did better time.

that's tip." second part out just read, as half Sandeep the called new pricing, and driving in Tip, We the the "You value, had We renowned put promotion increase probably carryout earlier went we boost week, across our it, you we about said pizza QX. a emergency and consumer every so a what's -- segment renowned we and of order count took of value And smart of business. Our consistent

get can't we're leaning repeatability is the what to tell MORE going I into. the so the what is And while into -- be you specifics, I formula can of

Operator

from from our the of question UBS. Geiger line Dennis And next comes

Dennis Geiger

Congrats overall chain little know you wondering a the strength sort latest in Sandeep on more and operating the talk color on on could the supply thoughts I margin perhaps margin that And if the quarter. quarter. bit about you gave saw on anything you of the quarter. full year? more

about talked exactly Anything of more the full could et for down full year. your chain? you year. maybe benefit cetera, for that the just kind on think the perhaps that what saw we supply You break quarter you deflation the in procurement, about itself as go-forward reiterating thoughts And anything procurement if

Sandeep Reddy

expectations productivity. What productivity the to QX investments expectations go in slightly our quarter that benefits back which really capacity a procurement see for make the in see. year. really did fourth great haven't is when did for think I to were And call, expansion, we we the make I'll our be margin we more, our But while we that think were first the chain out at expecting was talked and that Dennis, procurement Dennis. see Thanks, I year, later and got that's improvement the procurement we investments we a about second. because quarter changed. you whole are into to to if question overall, full and the expecting year, And productivity, to get it planning really to of the offset directionally, margin look in in really specifically some supply pushed we We

more So bit QX overall as the a pressured to change. it, but really doesn't gets a result little QX of year

and chain that's take I margins expect supply that. And so to directionally, we think to the about way where think

relatively little compression to the And bit quarter modeling. QX quantified Now on a call the we've to worldwide messaged remains with the in was timing other we a to have our we when rally. half help specific what were similar already year it but factor the you talk back fourth in some Included on your see about for G&A that to than said that that, you full we We'd call. really expectations, expected last you because

P&L broadly, than So saw different very not a in the we picture what on February. back

Operator

And Bittner line question comes our Oppenheimer. from next Brian of from the

Brian Bittner

was can the citing the program improvements it in the unpack But there than for but little may you general, 'XX? how program. XQ. was traffic? in believe of much quarter you can an Your build about most. sales strong same-store a be just XXX And comps you And trends, it XQ. sales in I like about itself driver traffic the in just what are basis the you've lower realize be in rewards all -- that the seem you why all acceleration one points sounds from talk U.S. to even first accelerated how can be Can the biggest the the just That's ongoing the made and not rewards acceleration of drivers XQ of on XXXX,

Russell Weiner

QX alone, you makes driven order-count so nailed they were what think our me the segments results, in business our general, that's carryout environment QSR. delivery got. order-count were special the current I that of let I something for on proud team Sure. given business, Brian, on is across overall. the driven it, different the think we've And They

nice reinvented activity the program. didn't be driving maybe the we folks loyalty It is us we old years. the it program will a program. thing for we time mean, as did. was we and and the it that much with this as reinvent about in year engage I this continue time The a and of part to big launched it's a saw few was first certainly Rewards tailwind we for next

carryout engagement much the are so is they higher it than And before. were than much customer higher was Light users before.

anytime a little And of I expect of go tailwind is so from. to from gives soon. where you coming away And that loyalty that bit don't sense the growth

Operator

Senatore of comes from question And Sara our line from next of the America. Bank

Sara Senatore

about environment. XP know to promotional more that things. of ask is I you a wanted the One is, guess mentioned promotional. I I couple

had the -- it more that appeal pizza been maybe think the for deals. or because of was even margin So the neutral of accretive absence maybe I

that the So going be still I'm case? just curious to if

And relative promotional think XXXX, implication slower that about with a high consistent you for then not XXXX to cadence I history. the as promotional a was intensity think was particularly of the is comp year But bit Domino's.

thinking I intensity the about sales the on same-store just so And promotional how from you're of to kind understand match. for potential competitors and wanted to implications

Russell Weiner

of bit. Thanks, little to Sara. a get unpack to I'll piece each try that

high what XP I kind low on think And value-driven is is a accordingly. we seeing of we're that about definitely adjusting we're what doing talked we're business.

The consumers the channels. and But I our on it's is are the to own be going though, own when what our channels. loyalty at between exacerbates thing best think interesting, you difference going remember doing important to we're our on look on XP, program really that prices always for what's in

given a price. It's off, why feels What out and this it and said So this there, we're you've free doing up away it -- it's you this, talked like promotions percent renowned which I think feels is like there, are down. think value. difference the there the means about between talk there, bringing and more renowned is it value the what value. When out means, I lot. to we team to value

So value it's talk value. versus

like increased them. so the there is the -- out may increased, has promotions the think there just feel activities power And I doing of be may that feeling what we're

QSR because powerful a I feel week bounce back Tip, buy great just understanding a both is do. we're and for You top how We out value XP -- of we or in to to Tip. And going the pizza $X break promotions that's X purchase from position there. BOGO a versus the think that rest in the with versus said, And They a just more like a emergency I versus

Sandeep Reddy

add just promotion, is subtext Sara, great growth for we I'm happening And as about we to grow to it expected because what's to when the going us sometimes think to. dollar our talk profit What continues is is something, I profitability.

the track $XXX,XXX what to And on exactly or for. are We the for more we hoped year. we're doing

solving expansion. healthy you did think corporate versus growth about profit last we And a Even And explains not this dollar the all of growth. for bit I call, saw We're the growth. dollar the is think very a we're but expansion. with margin on the stores, margin on very seeing what solving way profit see dollar healthy profit margin expansion, for P&L. we And we're asked I

Operator

And our from question from of Evercore the line comes Palmer David next ISI.

David Palmer

I was you as franchisees. hoping your and could labor speak how we that to chain, the impacting maybe just the situation not into just but see metrics labor Domino's both can and drill also you margins? it could for stores company sales business, availability the share across down supply is Any

Russell Weiner

Sandeep, and picture, big you talk can margin on talk level. I'll Maybe the

I that labor did me better orders think, delivered we we're indicator frankly, more driving we in QX times. both availability, fact than at David, the year delivery about the to is that operationally biggest the last and improvements

labor was a to Sandeep issue, profitability that an spoke that. front, if we to the so And And little wouldn't bit. flow-through obviously, be able do about

that me, be so is that, a right And to should takeaway now. working

Sandeep Reddy

is Russell and think I No, exactly Yes. right.

store pressure and a we will on as well, year in has statutory talked accessing and our do we last P&L reality, franchisee some minimum the problem wage is at as all is the move through some about the this with that impact been there think wage year. P&Ls. not even is call corporate the What increases increases, think I I labor

we right, But California the increases. wage good is AB I a example, XXXX think specifically, where had

increases our would -- essentially saw there. address increase to in over the had we we we wage that had have California prices to So to

we're And increase are profitability digits, we dollar adjust to the profit solving high in if is will throughout we we are California always for. Our probably looking system. single solving we But are price growth. in to, overall, franchisee protect but the modify competitors That's it for need the and what that what to actually to doing.

growth. maintain good to margin And but solving at good flow so we're look are and through, for percentages dollar

Russell Weiner

and the needs may know citizen at follow is if But profit Pizza the with our that. other pizza-buying There for franchisee all certainly, of are profitabilities X up about every over every profitability marketer of profitability world. CX kind those, we care is follows to because American we Domino's the of -- we the them. that out one balance there

smart is out. that which order on smart record had for in where going pricing, we doing XX I of is analytics went pricing We mix I on based around took years. And call it, competition think has doing, up. Profits is up, mean -- smart of the offer $X.XX years went wallets. pricing lots and what what's and proved our match been, consumers' with has of XX count so, the

And the And we pricing, as promotional that's how the should and every growth. value. count least in analytics about order already. the taken took think that's say $X.XX you're of we an and with it example, pricing seeing translated get is And we've at majority more year, we more much pretty can stay into way I

you so get and profitability franchisee QX. you when balance profitability And consumer

Operator

the next question comes Lauren Deutsche Bank. our line of from Silberman And from

Lauren Silberman

the Congrats quarter. on

You are behavior how and consumers changes using any down the are talked cohorts. strong observable and are differences signs Can channel? across each then with consumer particularly seeing expand any the on what you cohorts in whether brand? consumer about income there within across performance you're And the

Russell Weiner

-- we in in traffic thought coming fruition, that hard maybe what was to in Sure. about -- bit to orders and Laura, come QSR. were in come even are by, little We by to think, QX, XXXX, we hard talked I a QX coming is is

if at pricing because repeatable what case essentially, results becomes like the repeatable I before, they're our and It that's I I they're think And right. to doesn't if before. And be stable traffic the Domino's of important continue going just talked come. about think you're is we said see to that are throughout going a and year. don't -- there's the formula.

that back on have promotions brought we Our back, new carryout special, promotional or products. context come

key tap every count cohort thing, income about that designed order with is positive when piece before. to of into new the consumers that we though, engaging program. I mean, it Domino's talking in big is loyalty the hadn't you're we done is why think a specifically I

reducing sudden, to a compelling in customers a $XX $X, $X to customers program points. they the carryout much who this general a So purchase of want spend lot of well, just don't more money from is for all and at get

And kind the amazing XX-point and a XX those in the our old me, the has levels been of is X-topping was among loyalty program. to only income and driving other thing level lower for about frequency XX redemption adding key to program lower points pizza. think The you thing frequency if which medium customers.

Our and higher new actually level the program, combined the level. the are XX-point XX-point than XX-point

a you gives that through cohort across delivery in why of so we're and every carryout. breaking And sense

Operator

question line Danilo Gargiulo Bernstein. from of And our the comes next from

Danilo Gargiulo

specifically? can been was previous if Congrats able in you international growing broadly, can the was international with kind fast more you to you domestic you bit so from the growth quarter, from trust can are the lessons the East pressure line if you estimate of over And is markets more if them have this the impacting take elaborate which if any can your to the [indiscernible] quarter. that in are have tension and compressed Middle on And market? wondering how a I you expectations? causing what elaborate markets to little particularly,

Russell Weiner

you the asked Well, both and question. answered

with in line were expectations. great QX So comps look, our No, job. Yes.

represents Europe of relatively East this see than about Middle small continue a The income. talked in We last Sandeep time. had and X% East. pressure percentage, operating Middle our to less

Hungry X% bring you strategy. to what We the see continue But algorithm half us comps the makes to starting were to saying. return key in exactly markets to back expect MORE what to our life for is

Australia, at look that MORE as products, have that. in launched called launched accordingly. you for example, they campaign Their that has and they've business is products really responded delicious literally part had new just that if of So a romances QX

boost is talked just of We a mania, launched looked a little Mexico, QX them Domino's XX.X%. They at bit. which reported week. -- I about They

And to so our that's follow we'll starting why as of this best and return up, share work to of the see at the we starting year, to think these folks we And it's what is the this back we're practices. is to And have coming playbook, internationally. to job half algorithm. rally part X-plus that's why continue

Operator

Guggenheim. question And the our Gregory comes line from from of next Francfort

Gregory Francfort

Russell, single item having why the to you out build about how just was move the still third-party more you were on the reason I orders. the as because promote think for expected platform. a figuring made And comment you channel sales you to through year, I'm think of to needs you to to what mix and promotional has pricing exit still in structure? working year you a do terms and think you you curious, the what tweaked be do been as kind perspective of be where get to you want from

Russell Weiner

it. The competition how we're platform strategy our to just about different up. there -- were still we It's pricing sticking Greg, bit promotional the is Domino's. on But best Yes, little than more year. -- like they I at competition online said, a last manage are things of the just we

little mean all be is for us. of more. if stuff I example, So base discount your to to want that you available a higher bit price could

makes at that up year. to And is from that me get that all good We're And that. to promoting X.X% we're the Sandeep channel, about of the rate we on going kind Uber in the really feel team is of so about handling for on our is Uber X.X% way the exit X% promoting of confident channel. which talked us Uber QX. sales, we're

Operator

the Ivankoe comes next of from our And line John from JPMorgan. question

John Ivankoe

the actually stores We've put seen of $X.XX. of context that being fee. you delivery, your little bit it in can some the as a could context third-party In was high maybe as more own be if promotional. hoping I delivery where

that's think it's still York example, New I example. but an a

to up customer just being fee about landed delivery And of much current is look that opportunity any the feel thought relatively in answer over you I that are if terms the if but that might fee, value right orders question, at place. kind of How algorithm just how your the increasingly understand of the cost feeling you look And time? perception. structure total orders, no year-over-year still of matter at get the consumers fixed when to there's delivery, overall in on obviously, delivery wanted overall just simply I consumers' think

Russell Weiner

or John. other basis Thanks, delivery do price on I scraping Yes. fee. think, on We weekly biweekly a,

out to probably aggregators. stores on is direct so on lower based whose are that ones the what's recommendations a are of that bit important is more the buy to understand kind things competitors competitors little are have the pricing the franchisees our people And that than there, when

aggregator sign on so of the don't free. cost. the But just or up it, the where said. looking value. and there may competitively people you our customers is with for. They our it end for we've a long that that total exactly at we're we're be at that, competition bargain, the day, pricing probably call balance as what as got particularly it And though, landed is That's best doing They programs on it call looking right, cost pricing You're a aligning dominos.com. may reduced local through delivery we're

Operator

next Chris our question Stifel. from O'Cull comes And of line from the

Christopher O'Cull

items channel? the more outside wondering, to does that individual channel. lunch might Russell, even aggressive just now among during you as UberEATS mentioned of to we the maybe And similar the on pizza in opportunity sales see competitors, right I of on non-pizza drive voice this also on a share the what platform channel create And the the an orders is daypart? company promoting and more attempt to be company was seeing

Russell Weiner

not the the know you share head. I'll of of on off I one versus top something on that outside have my on voice second back one. to Chris, get That's the channel. to that inside

we seen like Domino's, we this about. the pizza just that just what and our items I've And really as -- I've a when Plus is And have you what us on magic promote this been been when all on pasta. big sandwiches here or becomes for used I've long us far us, idea both. seen Pizza offer and time, I've promote mix-and-match sales it sell media, of that's really, -- individual the before, is As

in what's really to is experiments area. want And working we we slow so in momentum through don't other do want what don't down to

not business, before. We nice have is individual that a business looked at We but lunch users. got lunch

obviously, lot this they're I And the to than who, loyalty us. to into person on go money point and individual Domino's, ability are through a of and frankly, so it items would allows they back buy tap they've part all that. And once us do then to basis those a is got what willing think spend then more per and get users for

it our way promote the that's when we're we our about probably entire to So better menu. think best is at

Operator

of Andrew our Markets. comes from And from BMO line next Strelzik the Capital question

Andrew Strelzik

I wanted store pipeline. the ask about growth to U.S.

that it's The first seeing into build even XXXX to see right know get as of tracking we the you obviously direction? half in And it's how just wanted higher back But the be move beyond? with of there. year-over-year, in you'll that supposed inflection moving comp the to expect year, margins you and it pipeline on I you a roughly are confidence and like from and and seems and strength flat that when year sense your part the the

Russell Weiner

through the counts every a regardless these with we're you clear going to attractive franchisees, up day profits hitting more but up, the year plus note, pipeline as to but our more the a of the indicator visibility lagging remainder pipeline proposition this and of you was results, and performance with really XXX on Stores I order before XXX becoming should of We've good Thanks. QX, through year, going plus. and expect number. can next Yes. tend be about feel got of the

Operator

from the from And our of comes Baird. David Tarantino line question next

David Tarantino

one the a maybe like quite evolution advertising to Russell, that's in in maybe on you had a quarter, made big in of other that question advertising done you've and as the opposed first focus more what the the It past I the with value seems drivers approach. and a topics. lot versus to and some quarter first comp gets the underplayed the food the related before

to us give you of separate from the of others? a was a much that was, I that could easy out So how if wondering even sense comp think driver if it's just you

Russell Weiner

to take with Yes, value just that brand-new earlier. -- And is were a think you ever want what of filmmaker the Domino's R, I noticed. team, on it's what's -- that's to the you we're and job. ad David, mean, is that and value wow, did about a food And X before. value, on answer ad. that we I'm the the it the brought feels we're be. for think, I the things stuff and breaking be. fantastic really doing has food We a a deliciousness through M to more done it's going glad it The not is the different photographer, know It's you saying, used I more. -- delicious have talk breakthrough. people where about renowned and talked are And And is it really. year combine than lot most happening lean like into. to renowned MORE, the you the a I Hungry advertising when talk than lot going And this Domino's I be I

you I noticing So that. appreciate

Operator

Stanley. next from Morgan Brian our Harbour question line of from comes And the

Brian Harbour

focus Maybe just on product service those about of that planned sort what your still this have is the more time? for operational that? Are view? in it just dough, kind year? benefit cost nature of consistency what's was And a and the things Or of on

Russell Weiner

And Yes. consistency Thanks. repeat purchase. really consistency. It is gets about

customer way. it of And sell disappoint in we want times. customer. that a million U.S., chance million to delight think or don't Every at pizza day. pizza, to so one we is way I about -- every look a at sell the want a we -- X.X the that it make look pizzas X.X is to we We We

and you results last and repeat we've about technology, more got And you're as really That's said, seeing stuff training we're little delivery the year, we this all ingredients circle the purchase. the the had consistency on then so consistency. on was baking. dough, year first And in times. doing now was drives focused operations bit The Sprint a the

consistency. program you you plus then be. purchase, is for that, us, top that's have right, the to on driving get offensive if think an repeat on where we want offensive loyalty to of and this So going that move be you things We have X

Operator

Our Saleh line comes from the Peter of question from next BTIG.

Peter Saleh

I the subsided. in some Russell, think at general. this category do of to just there out really fatigue share time? pizza out COVID about taking I think was to you U.S. ask point seems coming pizza have it's That of 'XX, wanted in going on.

Just taking you grown self-help share the curious in of have the think with itself in are place? you if faster than it that years. initiatives had of you guys couple been past just some has the Or category

Russell Weiner

Yes.

it's of lost we've we think is And card been, is share I what stealers. we've year, last have and opportunity call with line equal it were, returned we What back. to a what in our which was where is that always calling that population. years, tremendous, is growing that and kind over X this we're time, frankly, done category I we

carryout. so talk And of is self-help these carryout. always those drive and delivery tremendous. seeing the share mean are same the numbers and of about initiatives And in just we're incrementality helping the one are we dynamics I things carryout

the And carryout volume we store, so when XX% split incremental. a of is

profitability big if store are why to going another yet franchisees open is stores. so want up is growing reason time in And to addition to that carryout

all us. think cycle this for I so a is stuff that's positive And

Operator

line comes Tower question from the next our Citi. And of from Jon

Jon Tower

wanted to regarding I loyalty come your to back earlier, comments Russell, curious, the program. I'm

had the light pretty new the first the the How existing here. taken in consumer to that demand, of loyalty that -- windows? how had fourth consumer but outside quarter promotional into hear obviously, lapsed then some think and all far of place? has have promotional And users, brand windows changes I you're heavy responded good you've program seeing lot uptick have of from to separately, you those and so to mentioned members terms the during the a in the users, quarter responded I'm about curious the U.S.

Russell Weiner

Got first, I existing not the customers, to engaging it. in loyalty on think new it's Well, but program. say that program, safe really the customers only are

XX loyalty X. program launched bank, you X and free you're an woke instead up you points when had get this customer and new items If to we were your existing able of you in

that about customers consumer there so existing of now seems talk better. lot, And I promotional they're focus just rather than And promotional calendar lot And like I -- they're think -- on question more are just working mean, a there. When cultural you just guys, price a folks more. your count tensions. about and XX-week is working increasing this break not them customers cadence. We're that's talking hey I and for demand, But because better years are who we're I impactful. really it you're love why happy are get a we've difference points, things years big They're had years. on focused the

whether are You I the giving you service carryout you extra -- go everywhere everywhere mean, I'm go Tip, folks tips, We sorry, tips. you or today, Tip, asking they're for not,

screen that up get there. you So

I breaking tip we've time. more. doing using But weeks we're value is promotions, people we're we're more that expecting done what tension. fact, call, In ask that doing me about But John, Domino's because talk feels think maybe what for though And XX get a to -- to that's you. I'm and you at, long we're why to after like this it of we're to talk

Sandeep Reddy

because when at the actually very windows, add think the going program. and we're value the just and is it's loyalty -- generated program the with But through that, what's dispersing loyalty you activity specifically. the right really that's think just and look to quarter. John, I to what the something speaks renowned program redemptions is that It's of of promotional The about promotional doing cadence windows I'm through good? it And And loyalty transactions talked outside good. why to very because the you the strength I

Russell Weiner

which like but to great good. admit Yes, this was Sandeep, a a point, that's when a Sandeep don't point, I makes great

before of the that mix carryout have renowned value, this program. match, loyalty have to value get But to be of for you to tips right? member. delivery, program, a you get loyalty the loyalty don't up to for tipped the emergency to your pizza to be we get part pieces to is did have other the The different than and get get can are you You what sign

I working you they're versus compounding is doing the working see are that. together separately. things just these of what so And effects think And

Operator

from And the line Bernstein question Barclays. of comes next our from Jeffrey

Jeffrey Bernstein

on the below guess. quarter in mentioned you industry, quarter. the question whether and that X.X% of the wondering the ramp think loyalty easier the start I compares at emergency and pizza. fee offset that I first a know Domino's, comps Uber Just the I Domino's in surprises comp would for near-term the second On year. to of you the plans and more than I'm relative the would

wondering that whether just you? similarly surprises So

slowing mentioned category you And in the seemingly QSR a the Russell, industry, on terms of macro.

we're QSR a Just does as into defensive you? more of yet that think would otherwise. decade-plus there, wondering viewed surprise macro slowing perhaps something a and be seeing having you experience would I with

and So broader macro. the question Domino's on

Russell Weiner

ask and near-term I'll Sandeep to the comps, I'll answer talk about transactions. then question on your

Sandeep Reddy

Yes.

multi had near-term that comps of as surprising we've go is think our into success think lift, the I not the we beginning because I kind Pizza, I we great plans. loyalty the mean, at of acquired But sense in see the the were ramping about QX. we've on with QX that Uber we made to and we We course call, it's with program. of making we the into the happen we're So will talked some year, knew the this did all. [ normalize expecting which year. that point in to as But really, customers the at glad and we actually line over pretty did on much ]

slightly our And we think was be we very, is to very line but expect which we be what QX in So to below QX with still expected. performance, very going good, good. very,

Russell Weiner

in -- what I talking the was QSR order on was really about think I count. space, And Yes. the Jeff, more

been the there's now. in consumers responding and taken pricing think are just I category that's been

the results the in is pricing and rearview I'm in we've mirror. really us is for what about You're seeing the taken it excited

and I'm the be will there outlier sure And we'll little profitable And to be an franchisees. so on industry driving our our customers we are look, but of in bit who focus the doing value, same, others can think also a both there. I value

Sandeep Reddy

inflationary. it market smart smart to showing just was smart the the 'XX because Russell on pricing referred was -- actually almost is And that that up. drove pricing pricing. what I pricing spot about a taking in now really and value Yes. differential really this we I add highly talked want of prepared about 'XX when pricing. took no in The thing is on that's And remarks one lot interesting The in

customer are of really number right we were power? sure was through focused took. from we value you been we have things. The happened pricing through making restored and taking perspective taking had that is making the questions after One everybody that maintained; franchisee 'XX on two, pricing because Why not X sure 'XX got on, but you flow is a do the pricing, pricing else that

on just up get straight And QX. in QX and up so ended we the narrow and happening for and were we what's really teeing

Russell Weiner

Yes.

got was product. we've things this e-commerce that the of X there business. I before If tremendous about think things of are talked we one consistency

things So know consistency is we do on important. Product right really things we and we wrong. do can we conversion tell when

and that The seeing They franchisees, want don't that XXXX they're get is in for what consistency. it's what expect pricing and other our we expect, the thing they whiplash. want getting we're profitable in numbers. and took and to they People now

Operator

the next Meredith from line Jensen our comes question And of from HSBC.

Meredith Prichard Jensen

if other consumer little kind had some behavior might speak seeing? the come delivery sort of of I've you even prior you anecdotally that speak the third-party bit out the that On maybe differences Or and -- Domino's things about have the there. up heard a I that you're differences about just about internationally now calls, with all here, has was experience rolled been it's wondering

Russell Weiner

I like seen of and as be be about in, would said in looks with line users, younger thought into far Yes, Sandeep especially XX% about very on these is customers, this, it's Meredith. mean they're they, months us we've which sure, be Uber, some a few was single what more they'd incremental. incremental talked to has would so going earlier, we what really, it we

Sandeep Reddy

incremental. X/X

Russell Weiner

sorry about incremental. yes, I'm -- X/X X/X sorry, incremental, about

but nature Anything in on it. little how to it of ends just up thought, is kind of And side to we add? so we're and what bit promotional different just more profit being other getting the the a just is pricing thing of the way. And a the

Operator

our of question line Alex from comes next Slagle from And the Jefferies.

Alexander Slagle

Great you're ramp the in coming seemingly question to certain in drive opportunities the of out speed had just orders will see of on you everything a times. the improvements. at forth, your improve But to demand of volumes drivers or mean technology-driven these see guess, so XP with how and keep and here. operations more on I up speed it's further, perhaps volumes, versus starting ability require and individual the improvements I together able delivery up the a as hiring productivity there? I more and other that and to step surges volumes much acceleration

Russell Weiner

it is business really our scales about thing really, well. nice the Well, Yes.

know so but every like this, sounds we -- driver it an I And a time add have you the to we know add order.

improvements to have more do so just of trying and of And we're orders these done more we what is what with scalable, back a we've lot these made house leverageable.

attractive pizza a Domino's But to the or part as about, see franchisees franchisee, secondarily, job. of is at need become so a and order a as you Domino's future In now for franchisees to bunch importantly, of we talked And whole driving an maker. that's driver our We're start rally. to more about process. Pizza a

the to opportunity success seeing Domino's. and the driver job we're brand, is the And at so of attracted what people with the both

Operator

from And Stephens. the of our comes Salera final Jim for question line today from

James Salera

York Wanted to ask innovation. on Pizza Style the New

some promotions the color on guys newer are you people on? use potentially new the on with users? how have to or tie third-party new either can how might you program as discovering and apps those going loyalty driving Domino's that any into or Just other And from you have just innovation of triangulates that consumption the newcomers

Russell Weiner

Yes. question. great That's a

our first them. who the and ingredient is foldable important shows really one is of things customer is testing a new -- year New pizza This this is us a prefers the York a customer. customer that's thinner different that product is launch for quality who a to

in be are our pizza actually bit traditional cost hand going this think be so bringing may And who for may into but attractive too folks them thick a is a to little lovers, to be cross we type. portfolio

And it's I the this is for remarks, not -- so LTO is an have not us. this said -- and should this in

because And are we important launch to time, know so the permanent fixtures think it's it's products, our of we to menu. when they most

being a cases, New sizes X be The and New super you like course, other of And and through is I was our is nice medium, we're lot But said, in mix that of important. York part thing loyalty style of extra-large. available medium large Style, it means all and about which part in points a could that York match, with of $X.XX our promoting like.

Greg Lemenchick

Thank our forward you to all I you you, of today, again question to was That Jim. our for look want all to thank speaking and joining soon. call call. last the we

disconnect. You may now

Operator

for and ladies in your This program. conclude does the you, gentlemen, participation Thank today's conference.

disconnect. may now You Good day.

Domino's Pizza (DPZ) 29 Apr 242024 Q1 Earnings call transcript