DPZ - Earnings call transcript Q2 2024

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Operator

Thank you for standing by, and welcome to Domino's Pizza's Second 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, Greg Lemenchick, Vice President of Investor Relations. Please go ahead, sir.

Greg Lemenchick

Good morning, everyone. us our joining call. quarter for you today second for conference Thank call Chief Chief by Reddy. our begin Financial Officer, Sandeep Today's with followed Executive will Russell Weiner; Officer, our a session. with conclude will call The Q&A

this morning's available differ comments materially trends are IR on The forward-looking call our statements earnings and Actual of on to XX-Q, apply also forecast. could today. from release website, the our which both our or in results

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

the earnings referenced measures release to call. disclosures refer reconciliations of financial find please non-GAAP and that addition, In X-K on to our be may today's

This of morning's do call being questions permits. your to to our via replay also webcast and morning conference as recorded time for being want is website. best many We as our this is accommodate

to we to call the ask question to only. I'd over such, that, encourage one And like with As turn Russell. you

Russell Weiner

Thank you, morning, everybody. Greg, and good

again is Hungry performance quarter our for that second strategy MORE demonstrated Our results. positive once delivering

straight positive U.S. count growth, second we carryout income order counts our in cohorts. across the drove order counts counts profitable in business, in order delivery comp the way business, our through positive quarter, all For order healthiest possible positive performance

generated in expectations. to earnings continued comps with We also that line our international in see improvement were and our

X% year-to-date As guidance our for half results result more we a or of the operating track our sales more. and of to achieve X% annual of and back remain growth for expectations or strong profit of retail on the growth year, global

we on I want suspended store temporarily provide this our growth net morning. which update an to guidance,

and it that our reiterate pipeline continues grow. to want strong is I to First, U.S.

new in U.S. expect the through in XXX XXXX annually to stores continue or more net We XXXX

with store faced master as one process. below result in through work of closely both in expect DPE our Pizza We're this for primarily XXX closures approximately challenges Enterprises, by franchisees. growth now of international We openings a our to as XXX Domino's stores, they DPE, fall target to partnering by and XXXX net

and store India their In end #XXX largest It's net note XXX open starting they'll our then XXXX. their to year on track important China, and on and that announced potential. to per remain markets year, China between PCH they'll increase Dash by the openings in to of this of deliver expected XXX growth growth

Back it out Jubilant, potential in count India, the its to medium it store When May, franchisee term which X,XXX over our X the master based of in markets total in operates. over States, system global increased open on. years for took think the MORE Hungry you those United mentality the Jubilant's goal XX our exemplifies down to that stores global in X,XXX taking is

lens Now second quarter our at the through which for our drive to let's MORE of our business. Hungry results pillars, look MORE, continue

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

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congratulate to most franchisees the delicious to food. whose in wanted on to us striving service operators the to that allows I commitment make So marketing, our we're promise and Domino's our deliver has

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to continues frequency Domino's were our happy those to objectives. the Rewards on for deliver recall and light to You'll new objectives I'm customers of the users, drive increase carryout users. that report program particularly

are this active Our up members through program QX, year-to-date continuing is build. significantly that to showing

delivery we're is and growth both contributing also the of are to channels the our increasing, transaction carryout in which each businesses. seeing across Redemptions

first are under our in were half example, our they high, half as with business, our as Xx first of For in XXXX XXXX the in old orders loyalty program. carryout twice redemption loyalty of the

look and both value. in driving another value, customer were had continue doing X is renowned In boost it franchisees. for renowned Domino's we National to which value weeks, So profitably our and the QX, way for providing very Americans driving of are we're transactions acquisition. promotions successful

in can XXXX, you boost cadence continue our to X promotional around to relates it expect As weeks.

barbell the year coming is our the at marketplace channels of on through launch the into aggregator X% exit renowned to or into remains our strategy, and space providing of While through more sales is this track other, tapping our value one UberEATS. part own

we is our our Hungry worldwide do This attendance. E event appropriately at Domino's early hosted franchisees by In for are was They Hungry May, the enhanced we members MORE our with MORE. almost for in in best-in-class rally Everything largest team franchisees. strategy. and X,XXX year's themed,

was that of rally life life our I of that the seeing me and highly the across Domino's global the To and most future couldn't the showed. for energized our We team. brought rally our results of by rated to This all brought Pizza really close, time. strategy more to be franchisees and the excitement system leadership

is Our our show our results strategy that with system. customers and resonating

confidence great continue value for can significant All our that of to we creation to Sandeep. shareholders. And with this over long-term things me drive turn that, gives I'll

Sandeep Reddy

and Thank morning, you, everyone. Russell, good

with financial in right expectations. line quarter were second Our results our

Our in track strong has profit target achieve year franchise of start $XXX,XXX U.S. or to for our U.S. profit the We average versus remain more growth dollar on resulted our XXXX to franchisees. for XXXX. store

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

in During with line which QX, U.S. came the our same-store in expectations. sales for at was X.X%,

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

Our same-store by be U.S. growth new loyalty to marketing and sales our program driven primarily programming. from transaction strong continued our

high digits We inclusive was in California. from X.X% of benefited also single of pricing, which

to grew for from X.X% Uber mix Our sales quarter. the

The incrementality of line sales Uber expectations. to be in continues with our

by a offset delivery. a carryout tailwinds lower Our higher which carries partially comp ticket were than mix,

States Shifting count This to track our new in line to anticipate X,XXX. of to opening our system our or in the XXXX, we X,XXXth target the and store in net We XX added U.S. stores, store We count. remain the year. unit our U.S. store achieve XXX with expectations. growth end more brings by net on United

line QX Shifting accelerated as was currency improvements sales, international, the Same-store Europe, comp excluding our saw markets. quarter. broad-based East in quarter. X.X% results The we generally and the expectations to for in Middle with from improvement Asia foreign where impact, to in were

with as the stores. by increased net quarter international XX,XXX XXX than counts Store stores more we finished

our openings QX, the system higher global on gross expenses from to Hungry to this negative quarterly $X.X in new labor This million. operations store inspired the the in was DPE franchise which well currency as as be engaged, by everyone ready drive and strategy. to oil growth. impacted retail expense our driven partially as store closures. our increase across last higher and communicated excluding wide Income was increased expense This softness due X.X% resulting primarily as net openings return on on left expect Our from higher by of call. rally company's revenues impact I was for were high offset of foreign by royalty MORE extremely G&A, primarily sales

our was Lastly, X.X% previously as headwind and impacted the in $X.XXX tech fund being to margin contribution to fee reduced X% ad from increasing rate communicated. our QX back rate by

to our turning Now outlook.

retail We excluding the growth, continue key or expect based of currency foreign X% to following on global sales more items. impact the

a the First, X% long-term more and more guide QX we full for QX. loyalty be X% catalysts be in to or expect U.S. result or our the comp and comps as Uber in to above and XXXX year, of

we're saw on by we less offset X Uber. in below a expect boost partially ramp a in expecting we basis QX, Specific to slightly comps X-year as be to what QX week continued

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

guidance of year. X% or international to more in comps long-term half accelerate Third, the to back the

to we store business, Russell XXXX. to X,XXX new This in our related for DPE. As to challenges international more due our or is below noted, fall primarily expect number net now

opens get we we to update an impact the effects full the store long-term DPE for further and beyond. will our of on XXXX closures, and into visibility provide As outlook

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

margins expect First, you to to for and income relatively compared to in can XXXX be be QX. slightly flat the year, operating down

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

and chain year favorability prior Second, compared to now in higher expand are to procurement to the supply margins due basket expecting we productivity. the food slightly some

range in the come midpoint below food to for to forecasting are year. basket of X% the our of We X%

compared year and In to be expect prior margins supply the QX. in roughly QX, chain flat down to

being favorability the is margin offset slightly higher investment supply in G&A by Third, pressure within chain partially to levels. due

a approximately expect continue X.X%. global of G&A sales We as retail percentage our to to be

currency in lastly, X% of operating impact now XXXX. are to dollars be approximately foreign the expecting And of we profit

year-over-year impact by XX profit operating will our this margins roughly points. expect We basis

second quarter. the this noted in disclosures morning, repurchase not was any in our did As we shares

maintain We due to of October environment our upcoming Thank we you. as interest the volatility maturity continue rate evaluate XXXX. flexibility debt to in the of

open will line for We now the questions.

Operator

Dennis Our from Instructions] the [Operator comes question of Geiger UBS. from line first

Dennis Geiger

more to half ask even thinking year sort about are to how the this we given 'XX, into a again, What And year, about you're that it? of program of there bit you've Wanted on you you're year go promoting contribution little balance of loyalty. of and how you seen kind maybe and think the year? into it, already the the expecting the marketing the back as seeing guys loyalty what in

Russell Weiner

Thanks for this tell just for been I'll has you, tremendous. us loyalty the Yes, question. year

light program, Day. we we our want we loyalty delivery drive doing think We there, you the we're check. wanted continue, and the customers, our wanted about users to engage carryout Investor with to also to at outlined customers. Obviously, obviously, our objectives We there. If drive new But that to check said that. frequency

hoped -- of as number is can just, the every thing this indicative had doing gave the we a number increasing. number new to is how remarks the user opening single me, you a far at is as going. users, really of tell but We'll my users I it year it new that in give of So would. end that I is the

the do really we loyalty of to were we drive things So X carryout. use to going said remember, is

our redemptions loyalty big were under they of with year. of are orders high is the as And this perspective, the in carryout first half carryout half old how as one twice program reasons. doing. last the of business a first this in from about orders the So is Sandeep year, talked

all of the objectives, we loyalty is what had hoped. just really on delivering program So the

Sandeep Reddy

driver of I'll thing is is but us. we've Dennis, to talked One this this previously, multiyear for about add a that, comps

launch compounding And we of on is the of in this of or So in piece where did we based the comps we fire years saw year continuous just the the as X launched awards program. over beginning. X XXXX, it

We program expect this as a similar kind we go of well. through cadence as

Russell Weiner

health counts how this quarter, you in and the order strong. when of came so And Yes. about think

flywheel loyalty customers program. into All of the going are of those this

about today's with program on So that's really business orders that's how we're everything and the loyalty sales, why firing else right excited tomorrow so are the now. working is

Operator

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

Brian Bittner

unit the this just end But to has the shortfall is a to witnessing into relates when It seems it at like dynamic long-term guidance, growth pressures year. understand As more? bit lot I the outlook primarily you're dive can at you you initiated a DPE. changed versus related last the of that

to the X came X, months ago. were expecting surprise suddenly about So understand versus how trying what just better so you

Sandeep Reddy

it's Brian, Yes, Sandeep.

master went our the through the and Day franchisees, I completely horizon back have the DPE think working that at And that on in X for December, the all we process of for we including with so And I when calibrated and the of both that was they think like go as you XX X-year that we were aligned. business. that basically expectations time, well. to Investor

our started then expectations well quarter and just think outlook DPE that forecast and into DPE second the with on team the engage fact, year. clearly, quarter, And we which saw first with and pretty release into the and outlined the particular, and their DPE. from that second both went relative we there half, we the really became half, closures clear the to conversation from out land as targeting were it as new in that continue as of in the to for we be will discussion with we France the that seeing. that yesterday, our to is was for validate So which, end put had not Japan in through the number fiscal second therefore, to QX the we seeing year. impacted as risk going call the started cadence, increasing market, we got And that store But then to they and of got And they're that a which was we openings as I closures this actually in well.

second in this to more apart So expect of the we half from in what seen we've quarter, pressure year. second see

why could range is The potential the the just shift I fiscal well for suspending to pretty 'XX the And appropriate in of see all material that fiscal year. this through not as And of guidance the I that, it collective range to update was So guidance going this think the think XX. big? is we And year. when Why process we the it of our but for it our you that were take as openings. of and update to closures a Because X outlook potentially 'XX. also, temporarily timing between felt the the that's X we're go long-term from notice XX apart we on numbers XXXX. if you

understand talking I GRS low-volume so come is operating want mean, we're reason plus. we're closures about of and talking are our the that's went when But is look the growth plus guide of of what I very income And at on maintaining back Brian, to this background, that one X% I kind that. things our stores. the about for our guide, store just long-term of to you think the in So we X%

together, you So is the immaterial impact of when scheme to income all grand the in things. operating actually really put it aggregate

this reiterating income guidance, in confident we're so we And you that's are that as our and saw very morning. why operating

Russell Weiner

that. Brian, add And to Yes. just would I

business. this have to how we me what levers many think is I this grow shows

with of put we're let certainly, some but this perspective. just DPE, in me so working And

X% are things So our firing. -- still for have the profit means that the the X% on plus. plus sales sorry, and X% DPE, And headwinds those for of other target -- lot sales and in we with stores I'm that a our and

maybe -- just with And development. so I'll start

stores same So stores, as increasing we since outlook. news opened XXXX. news, China that we've have and We've time are of this XX,XXX have got those at PPE the half India today we their

our the about in months this trailing target momentum year about XXX only we've in the we're closed total more tremendous. said is to obviously, And And we that hit. think in strength us U.S., is important, the so on the for And we're going room openings when closings. which And when stores, of you our -- in development about as is our to of plus development, XX,XXX you are a lot think U.S., really of X still X,XXX. so his stores out the a way have XX then have Sandeep remarks, are

And we've profit the things firing in pretty is numbers healthy. got overall sales at still at are our and time, these same which forecast. think, said, I I why so And development, coming like is other

Operator

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

David Tarantino

is the signs My your and seen is U.S. in of slowing restaurant question comments feels degree the the I follow-up, certainly And that outlook spending a the for of in Russell, consumer the unchanged. like we've year increased. guess difficulty it has being about on parts industry.

So of targets higher And why difficulty in I think degree to ask on this the some were you're just is versus confident or what wanted and commentary to whether holding give you year. unchanged those you for you thinking so previously?

Russell Weiner

happened. think we've predictor in tells we've grown every about the best future, as a the our in -- income business, carryout about our happened consumer is But what's that delivery -- business orders let's with slower. -- had spending a And this cohort. backdrop, room right of you're though I say have me, can't I what's To probably David. who Thanks, me Yes. the even lawyer is

but order We in haven't International. talked grown about count we've international,

struggling buy. folks on what's are kind in an decide of what that's going economy to to maybe where so And

as that then counts expect swings positive And momentum in the are our continue. to order so eventually, momentum scenario, I if

brand. So not that's just delivered what more that about when could the to strength the the times why you do quarter. me, how the be about talked of I we are tough, results And for excited

Operator

from And of our Andrew from Charles line question the Cowen. comes next TD

Andrew Charles

the so less Sandeep, you're in the quarter more one given curious trail these reflects this XQ? about expected you given just around comps in XQ if comparisons, just I'm or forward-looking And how it's observing talked U.S. what expectation that are week levels. to your boost far XQ

Sandeep Reddy

thanks for Andrew, the question.

I remarks, the what Russell's in have do talked it's below previous more prepared -- have net less our QX it's one in but go to basis, QX. for back no, do ramp slightly week. think, I'll about about is We on boost the in we saw is I Uber what answer. which we But a expectation

We to and half. tremendous same see entire the in expecting half, growth performance terms of in are second performance for the we're seeing transaction first entire that

very the ability in momentum And confident kind so QX. that back of half our in we're first in seen you've deliver to the of already half, including the business the

Operator

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

David Palmer

working the you plus guess us And U.S.? sense the going concerned say, volatile were value comparison. seeing the the is U.S. reflect think a quarter are kind like a have to stuff? on I of the they be question sort weaker be of if like in the where of message are looks do that fourth $X what emergency let's this than -- It the Could then you And and in tip. worse think you pretty April we a you're the terms pizza given response quarter I concerned the in not separately, from the is you consumer in quarter, quarter, when didn't the what a third -- you in quarter X% the working forward people of of and kind in people see about data are I sales the give quarter holding look fourth like that to two-parter. I'll it about example, make trends X% is third about to going maybe, things maybe for think

So can of maybe those. both you address

Russell Weiner

it give I'll I a and maybe shot sure, anything. if miss Sandeep, Yes,

well. look some quarters, balancing far term, short and put And I in everything at As always what we to not from we as days on there obviously, are news volatility think years the out weather as the there. based

to was working you the of was and of one so example, -- an doing your I'll work second like big we launch What's for not talked working. of part And kind the is question new maybe the we picture, this X -- what's your about things just hungry using strategy. what's give going working year, are I as products. And we're

launched the Style we York So just New Pizza.

Style are, crust. food. out innovation all Pizza most York or an there not, don't our some is people love believe intent. it It's with about New There traditional delicious the who

better it At hopefully times value. an product is time, It's our It's foldable incremental & delivery that the fold. is in Match excellence. our this it years cross promotion. bring new was part So people operational That's delivered more same X ago. of program, of the new was in than loyalty renowned Mix part also

the been what XX on XX that really kind going that's David, drives seeing talking we're for programs know mean, what cylinder it's effect all doing, more. between to of X the it's From this for of But you've And and connectivity a the things been you're growth perspective, orders, about nonworking firing just is here so we what bumper I the a stores, tethering There domino truly has is we're market traditional I've the I stores now. always have the And share. never together. own. years, pizza company. on of There's -- these That's are that category. seen, sticker its it's right all anything think orders business.

your franchisee now moat with We a are stores fund going winners is everything and get profits. do grows, grows, from perspective. share orders franchisee profitability once right you our and to And advertising big moat be and your grows, that, a you filled

Sandeep Reddy

the to a mean on we from volatility. Just Russell the that's driven quarter. couple the very points. really frequency I that of cadence steady And build seen just that didn't I'll spend the [indiscernible] is David, cadence. see pretty the U.S., the about sales in flywheel talked frankly, saw including clarifying and sales program We about of a steady you any we've loyalty year, across continuing consistently there. talked the second by volatility

don't think the question comp, and asked I the and And was in be volatility QX confidence that I the the remarks, as see X%. we at in we prepared expect you said QX both So other the all. above the QX to

So be below by just Uber's that maybe the explained boost the slightly offset of -- of the because of weeks of QX number boost timing ramp.

Now going to QX, us. to for X of the that things we is multiyear talked loyalty driver a about earlier going was be

launch, we're sure, in to program in compounding So program we seeing QX, the QX. lapping expect loyalty loyalty in be the but tailwinds from still impact the

In build. addition, continues Uber to

drivers, case more. in there's And those and X% more or quarter, so much with the is reach be fourth we'll within both at very, to for very hungry look every

the better we do, So is. more it the

So transaction strong we're very because And economics. confident. really this driven, is really all driving it's

seeing the driven actually to think the a significant that's into chain chain I side on profits. which performance on you're So grow. supply going franchisee the continues supply franchisee And also, by profitability that's financials

So back year. of for overall, our outlook the the confident very half of

Operator

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

Lauren Silberman

wanted about ask strategy. value I the to

the strong in about the boost one one week the performance. that third clearly quarter quarter, I to, driving leads talked you in believe, So fourth

and much how deals? flexibility increase what going then do you through in is focus value value industry, mix seeing the promotional And are have to activity? further increase any the you in Given

Russell Weiner

Yes, Lauren, question. thanks the for

different what doing think which very taken. can you're seeing since clear launched very What Mix it's done, are in right folks we been this of "Hey, in now, I the than think special, kind dealing is and is I we've And individual value price we're folks, it's you value." done there's when industry that and this Match. & on telling back we've what items, get XXXX customers, what

doesn't price, high, Match & not high price Value do what is you want don't for is the for value you want. want you is It's is the Mix really the X and things. what for price the something that price but it's much. offer Our

they And our sandwiches, think breads, of so of consistently you the salads, play part all value that order up think those morning then having our that pasta, when they know where trusted is loyalty you value since to count the and of that about want platforms, wake That flywheel. consistency of when become think people about end pizza, can about you're been decide things you part of they order, all desserts, have seeing. they the chickens, trust leading XXXX. in And Domino's. promotional to And

just to And order. just think price about way our make I important approach not very explain want that's, you've people so actually to what it's price. for I And is period, -- grow. as value It's sustainable time seen to this a sure we over to

Operator

the question of Guggenheim. next Gregory Our comes from Francfort line from

Gregory Francfort

domino some reference the there. love I Russ, just just and Uber of the But commentary on there. effect I had a question the incrementality of

that DoorDash you've X the on about about And on and we or maybe I still and the changing any what months. timing year? think update expect look in maybe something it you last what how message would marketing for over then Should of learned X like? talk you're maybe Can next had some on the X months? you've the thoughts

Russell Weiner

to after we're this, sticker a so Domino again. you different Greg, it's so Thanks, last look bringing and bit would. performing think it little is about going I we effect It's worth And I it the bumper send at way. quarter, in thought want talked of you as up but Uber with a to doing that.

from high-low we've we're And goal of approach what our a bit was, is to strategy an sales in how that bit we channel. with have a our is channels, sales. an sales. the And about way the the price, X.X% higher would tracking little out of from starting a algorithm whether eyeballs. discount it's of a first, in our X% to seen win. more you it's our both, a Still if But towards actually, kind everyday So this That really or a to of more How uptick get price not year it's -- perspective, compared slightly -- different. of is low originally little okay, right? can our loyalty of program way is price coming or lowest shop be customers part

we've that you're test pivot way, seeing the continued to results. and so and And it in

So again, would. it thought folding like we year we're -- the

to be with about But is whether runs And exclusivity and our leaves at the do DoorDash about stay at to opportunity in what to. question looking us fair up years the so what we'll think that and really We've we us with X talked through current billion other point. on is Or so economics about do point, the DoorDash Uber get not we or we which potential would hope all so or the QX. or is At of that aggregators. choice, that a our that the is about time we for aggregators, be renew open share your exclusive? to $X

Operator

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

John Ivankoe

context about is in X.X% splits Especially growth brand. which currently U.S., U.S., asked impacts the mature for actually store of around in in and at high closures the I France in you're rate a Japan. of in store the fairly

of the learning splits. what it guess, may from can kind either negative or markets Or as Is you talk And site model to how be either learning can guess, who see current cannibalization the Pacific necessarily terms whatever learning it, they I guess, U.S. penetrated? the be of follow for you your how of in encroaching terms side what base? is you of in risk I of want is is of that on in do sales side or that want overly any Atlantic hitting who impact I level your have of any as call same a who be your on targets terms same-store you there to, store from about that store So net, in to acceptance do? terms opportunities look have markets densely asset them at sense without of penetrated? didn't of just existing I

Russell Weiner

I'd remember And I'll used start maybe the headwinds disclose splits we take I were. John, what Yes, actually that when with of to that. fact

about when thing ago are. how model a them they of not we're that fact the incremental. -- is Domino's anymore, us decade great store, you of the carryout the leaning is of split can a So you give a XX% about carryout disclosing sense XX% into material and volume I The

places that a don't to to so drive you're Those X right they pizza splitting these And getting you're their past all Domino's. on when want territory, a way customers, away customers.

years come back with remember, that carryout your Sure, so same-store we're only more And closer carryout more customers. driving number and the driving programs Domino's your has they time when X than is to better you nothing consistent the carryout. drive, have happens talked business split stores, XX% it's you the on these the stores, delivery, through it's then can new but were to delivery was we're when carryout our stores. see being what the with get we those And That sales better. we you more. franchisees, you for ago? when took But I do have, all lot split about that from our earlier customers a how get does more also of you And carryout Sandeep not fire business sales you

international saw XX% wonderful got Australia is in one share asked what is a the and a it actually, when it's you market a over a really probably delivery market it huge it say share. they They've it's in been I -- they Japan new in X driver their with that split was areas, fast. formula. and it a to well. and carryout learnings, Australia. was business. talked our tightening of But penetration -- think first winning shown been DPE one cycle was folks that's of little stores time lot obviously, a through that they because really their strategically had And has about too do doing of So going I'd What They growing a about

Operator

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

Sara Senatore

restaurant one just I on and have actually new clarification sort a question then of growth. the

is seeing should So that Obviously, franchisee cost something track kind inflation cover the on for dynamic that clarification the you're still in perhaps clearly pricing of just was similar. that broadly franchisees profitability India. the growth price modest are insurance? maybe insurance. expect pretty there versus of Or in around quickly see we the whether but of you to net increase didn't world. inflation look this kind the you quarter Is restaurant mentioned anything about in forward? like question onetime parts targets, on for then labor broad the about just was But on strokes, China that what going Could in and specifically talk different -- volumes strength and

in accurate. a volume or, that would hit overall that's but in of India, retail than for Australia, and is mean be lack of perhaps a more I guess, not openings to sales openings So a let's in closure presumably volumes perhaps my say, China higher Australia

Sandeep Reddy

So sir, pricing with clarification inflation. cost let me versus on start

and insurance stores, corporate happened actually at you much when speaking, our the at particularly. through flat in go really we contracting. insurance strip I quarter profit as the to we dollar see out in actually we frankly, dynamic. talking And actually and stores And had what that what franchisee that the We're expect resulted you stores, that growth, see. charge we're look charge, margins if think roughly the look well a if were as And grew. about an And pretty in on dollars that's you're we corporate profitability, really, to expecting and corporate year. at profit exactly margins looking that's

growth on stores, to closures the to as then the restaurant to are very low-volume expect as And and the specific your China continue India and stores We margin comment corporate as both stores. improvement size the essentially think we're I well see growth dollar talking on profit about that well. of in

of not different they're the necessarily think across I comparable averages all perspective, markets. that the from to So

about, the stores, And and new record opportunities specifically store generating talking there. kind be they've so the small China relatively sales drag that growth of And openings robust. not and I over in their continue they're is about the think put we're the Japan the with And release closures France. to out is actually

the from China. So exciting to coming growth see

Russell Weiner

industry, are of for best best margins way the order assuming I'd really us think by the and they a that driving for should do area the is in Sara, And I the -- versus be, cover that, where to way to add when cost you inflation, price. think to about

inflation a thing. negative some be folks And may cost for so

with given about if counts, -- in right more all now of frequency, we're our and us, I scale, pricing can the results time when and leading that order team going do I insights the a For And now, forward. to to moving not it we to to doing with this do to see day, knew out look price. research, drive with just customer. give And environment that drive what's take are to will continue we happened. our headwinds because our into because nod it away what Well, we to getting figured time get want through and we and the those it was without can questions X price, figured you pricing we all that's of decisions also what's take and we out decide when was

and you order real do counts. it piece Now put you stores. translated consumers And to watch what lot is gets it what's is do your do. great research, obviously, you the franchisees been what it what its the of is the when watch And best is the then then life you to of a down it, But numbers. too,

happy. offer recommendations only consumers menu and obviously not the but our offers national on But So local with are are franchisees who sticking pricing.

time. has continue something for us worked to will And proprietary that so think, is and this I is work and over

Operator

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

Danilo Gargiulo

DPE more if bit can you at softness what least can by of in potential your your and guidance other later see if to be confidence color you not think, share pressures to little softer And your on on view, wondering will a opening also, and going another reduction with that is is what unit DPE? original that level was the going it causing franchisees you closure expectation. we're international more in store specifically coming to give I openings master versus the limited only

Russell Weiner

I'll they're speak those let release to Dan, about DPE's of thinking what kind Yes. closures.

being in of example, said an confidence gives piece talked of Japan seeing little about kind they that. China, they their and earlier, the the Jubilant, of increased I to the be as bit openings DPZ of openings, and XX% me So now a going each results What about they're XX% DASH outlook. rest and our the algorithm they're of to aggressive

the a I'm was that. being is, And around not And the to kind so of look, XX-plus is the do. handle miss on part the over the what And being what time. plus show the to the plus on is in up look that X and made trying business of a markets world of basis a that in good able But clearly from of that's up really helps countries XX end business. on all leading us sales X% beauty Anything to how . to basis X% away add? profit

Sandeep Reddy

No.

Russell Weiner

Okay.

Operator

Saleh next our from comes And from question BTIG. Peter

Peter Saleh

ask carryout the what you just about then to you positive wanted little mentioned on stable? that, new both And delivery talk on it said order I about magnitude thoughts a the U.S. so on there and you're volume. of in guys on these you understand. Can know I I my any that Sandeep, Is -- just they're guess first all these cohorts. call low how just just bit that's stores way counts income seeing a you are Is accelerating? in -- you we follow-up of across us store volumes terms low were to lapsed And that DPE, from question. lower very that give said are Are customers? an But thoughts growth closures Are any these any there. the users? -- it, seeing order income Is of seeing you consumer. in

Russell Weiner

about at that -- can look way talk profit you to Sandeep, other the is Maybe the Yes. impact. just

Sandeep Reddy

Yes.

terms I with the very me to the part happen, low closing that market of Japan to second going of and let relative question, the the in and volumes is in fleet stores -- what's think store start the of rest in France. on the all rest the the which the are volume right, and

for and the a is halfway impact on XXXX, to few so the forward million in year. the even basis So number. ready and considering have the dollars a a will very material impact limited profit for on it's XXXX

very Peter. from small, answer to question So that, your

Russell Weiner

seen. Yes. stress income question, and and specifics first segment just but order of to just I'd I've about say balanced the by not the Peter, count our this only ever also every giving in the I of the also order believe some industry that's delivery history, in right And I got we've is in now. on the And what true carryout for count, try the most --

there from order count question that together you put well. specific have Your not of pricing, used loyalty was X you our only program the is to remember, customer, the things. but And positive on intent to have lower-income we part as as the

food buy get $XX points. of any to worth to had You

Now it's $X.

hurdle a easier. little is that bit So

to buy You have get free. something X used to times to

get is -- some free franchisee item great after buy for because and much is margin orders great the the which too, can you than the for customer, those on Now the to XX- on XX-point our orders, better actually XX.

program design the kind loyalty So not it's of this. of and what we design our it's fell of not both was into like the just going in intent This and our pricing away.

Sandeep Reddy

about. so And I seen has the beautiful is that think And it the of been through cohorts. Russell what Pete, really reflects all first thing, half year. balanced consistency across it's And all the income is talking

Operator

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

Christopher O'Cull

Also.

with maybe touch intent Just just this to expect strategy? innovation given answer, later you the launch success of the leverage can that York we'll the talk can you part of this And on that whether you New year, about Style innovation Pizza, approach? more it's

Russell Weiner

Yes. did in don't Sandeep me spot, Pizza I'll Well, a thing Chris. the keeps the one you guy Sure, who drive the Style telling was of York radio. which for for tell those me. know, not that you New face was

idea York for works New out. innovation review, yes, is this that with But your of performance So own we'll intent. it's so when time how of piece see

products items we've a XX, new launched the X off takes money, of years can't menu. If at -- there of we've -- that last you that time. it a than are XX product lot look lot the think more Launching I takes that back taken a of Domino's,

are a to still or you were there. strategic be these items role whether Whether is And not not so it. there successful in needs or

continue do you give a you it about of we're So say, forward-looking to think any -- I'm going going to to X really to not year. again,

We right? this Pizza not talked traditional much. like Stout York customer crust as about our that a is may New

there's reason for a So doing it.

Step have last the of -- and when thing cheesy pepperoni probably about Pepperoni guess pizza. you innovative not not And in But some world. of year remember, If we XX% people have and Putting Okay. platforms these that something bread, bread. we what most think cheesy what with reminded did what? is Chris, the we It you sell all is

continue You but talk remind to these out continue to figure a pizza, got have about to people to way platforms. that you

examples and Domino's. And more X franchisees. order, customer to is intent. of so those good platform probably are they maybe that after is One doesn't the profitable is it add ticket And for increase frequent going when our people a their that a is other reminding of

Operator

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

Brian Harbour

some store If about follow up the comments I margins. on of could just

you dynamics? the that the that's have product you aside kind talk about affected count if did dynamics growth, there balance set of think just mean, you just store any is about inflation? insurance I sounds order on year? if offset Do still you it the of mix being Obviously, like that pretty of case being impact, right? But this this And through know kind the maybe have of significant there's also Could So side. that's kind sort don't labor mostly of wage more I margin that.

Sandeep Reddy

Yes.

actually, overall, still we're we -- operating. data So about the thing in they only dealing XX half pressure basis, that think that a of pressures closer the some of pretty and on the ex was with yes, set, actually to got Brian, as we've that growing. economics smaller still MAs it's good insurance we stores wage of lapping the adjustment some getting the were much the which half we're at definitely we look and a went is actually And first -- expanding right, there wage first because took. you I And through when stores, the company

our data to full happen. We expect I grow. year to to better profit continue on to that being so And why and stores, franchisee limited we analog the emphasize I expect still because -- company shouldn't what what's an the is relative think for set That's happening the said the stores want dollars on our margins I is company be I to in view to terms. stores as

us definitely what the the on -- On seeing and growth we're or the confidence more track. that across $XXX,XXX stores, And balanced gives is we franchisee very profit business. that's very,

Russell Weiner

an that headwinds guess question is we're that we the pizza And are emergency on Well, and just means to creating And folks are Yes. of successful reminds how and had headwinds, about me lab we creating of going how maybe I I'd say build to overlap. the headwinds. are something are that I there potential we we beating earlier that business headwinds lap question on and what we're in I'll really headwind. wondering, did QX the on because just business going those a in we're questions love of that the business in

think who I [indiscernible], owned this emergency lot over, of in the you not pizza, pizza. a seeing Everyone I point. if has to I'm knows owns price going you when for about know so And this price challenge. what are And think out how the concerned going going always I team now ad who time to is talk where what as a there has price and be, that. an are is who they're about point about country from particular emergency during the you up folks know And

like value. carryout have And UTP ETP, so tips, that, things renowned we that's

more think, of going I are to what discounts be are I our team noise. see And you that pricing, there's lot really to more as, so does that. believe And breaks different restaurants there and as to customers adjusting in noise through a

Operator

And Todd Company. the from next comes of line question the Benchmark our Brooks from

Todd Brooks

Sandeep, a XX when wanted about talked you loyalty the on a about the redemptions. last and of sense at redeems continue quick that Do XX lower forward? time trend that quarter Just level is to And being if point so. that with I that a as to passing. follow-up talked do tiers have enough tends going somebody to to you see point majority think loyalty, you I go reward continuing

So coming at if customers loyalty lower it's faster those flywheel stick those yours? from almost to redemption frequency a

Sandeep Reddy

that. it's yourself. So And Todd, answered it question really, and you asked the exactly

consistent in continuing we We trends a confident go it terms have been driving we're to continuing very of transact the on as and very because beat. levels, redeem. they're and frequency and that redemption XX of forward seeing as along multiyear flywheel what XX-point the that's move And fly is we into

Russell Weiner

with Yes. intent has how loyalty And renowned is It's that not program new a and the back the intent Todd, value reminds just put of together. question innovation to products. innovation with you your me before,

if or emergency all points delivery item. you buy pizza, Pizza a Hut, you getting you carryout one, one, you free that, a tipping of loyalty of a month. of program. in sudden, either recall, free buy Well, program. the With X at a with So our a get if you're part do program, our you're can you you're XX part you're

that getting get sales. it is You then putting about, redeeming. that just wow, I we're stuff understand how if really got quick. important there the folks about driving thing And earn. tip, you've for and the to programs is driving part you're out aren't loyalty use easy you're clarity They're can our a people of most second item loyalty program to your program new The

Operator

And line of Christine our comes next the Cho Goldman Sachs question from from

Hyun Jin Cho

worldwide May. have in the know had rally just I So you

your come surprises? worried around be there world So event? from strategic the the excited any any really key Or What hear areas franchisees takes priorities would common most most are to the about curious are great. were there up have that that your about,

Russell Weiner

Yes, not just And me a Christine, rally. saying fantastic it. it's this was

one here ask highest my numbers I'll of give as times more, we've you had had key we the blew ever quantative it. called, is lot things take that. a the were as were later we've did key numbers people. scores leaving took these came But send message. like some what rally. I'm -- out the get the We on studies It what away do if earlier, for But the was you on on one and is it people far to of And what of people that everything away thing it something more really And Domino's, Here's the sharing shouldn't. XX% had do -- attendee folks higher at you the a away I'll never one. message. the I who jobs we they or the like was A rally mind. is to cool people sticker anywhere to teacher look rallies never than they're a results We've do there And more like whatever bumper that, needed hungry we're do you do. was going is what rally. does this shout knowing

interesting." "Oh, markets went And food our and renowned value delicious really we changes cool of in saying, part seen example, the M what And responsible for were, really, right franchisees U.S. Making for so sure of in international hungry more. lot you've had it we got make the happened? and and is We saying, I'm We because the way." idea the a the the marketing "I international franchisees really the of leaving deliver back it this for and O. it. me for

just makes they're really I system. pretty come in happy. about away have But to -- our so talking about what talks future, when believe excited. X strength all It's it place, nice not us all the And is I profitable franchisees they the only of

Greg Lemenchick

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

disconnect. You may now

Operator

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

day. You Good disconnect. now may

Domino's Pizza (DPZ) 18 Jul 242024 Q2 Earnings call transcript