DPZ - Earnings call transcript Q4 2024

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Operator

Thank you for standing by, and welcome to the Domino's Pizza Fourth 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, Investor Relations.

Gregory Lemenchick

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

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

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

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

Russell Weiner

XXXX the time. success working. was average leaning MORE the helped this pizza annual on X% value our last that and XXXX. I'd Day, believe Hungry headwinds MORE at strategy. first is introduced Domino's, good our against for for full U.S., Hungry we've Well, the thank with for our Hungry gains anticipated and seen At focus morning, It year XXXX, as start share QSR at you, that pressured like December be with our in When look consumer at the market everybody. in market Greg, would executing about year. to in And our strongest of the strategic proof back MORE drive share spending the more our growth into QSR to would key knew a renowned pillar we right call in value to plan consistent Investor 'XX brands win. offer made We of we we than

share combination of best the and we marketplace ahead will In the success As value-driven QSR sales positioned that it in market company's U.S. we retail the because continue. XXXX, place. of grew in will measure gains the Domino's do is a spending X.X% a right the pressured times, to look strategy we We believe to be XXXX. by just achieves. in consumer have challenging well these

continues positive for something Order economics order meaningful unique count as key Importantly, has the industry, drove that franchisees. been to we U.S. count the growth. be delivering growth to in best-in-class our

strength XXXX. store economics continue on grew which channel was the revamped Uber. into Domino's growth, Rewards and the program Orders market a These of with to aggregator share strong drive our entrance in tailwind to our

is reflect pizza of addition, lens same-store I MORE Hungry we approach. New didn't news have We successful year growth non-pizza MORE Cheese the York for we our in XXXX, the we purpose to offering Mac launches who to we business, platform And added most [indiscernible]These for for the intent drove with new want existing up an launches, in food these with Style. to X customers stands product delicious our an and our New York has X% our delicious we And commitment innovation we & results continue in industry Hungry sales in significant this strategy. a type through market. food. brought through over prefer to most see demonstrated in crust a product Domino's portfolio to Style any for with how new There to the carryout illustrate bring Pizza our have we behind clear In and

photography enhanced how launching build An to is during and XXXX. team our out the e-commerce our food. also to intend we to meaningful new important component our the changes e-commerce XXXX. which We've food platform roll our we we annual on new plan at We've development this X by existing our completed of and XXXX, goal. creative is strategy where our through momentum made least in products, this showcase of In continue in upgrades our to platform the which U.S.,

driving training site provide new excellence. we for for improved our for an user experience highlighting product the delicious while how series our new to out The improvements and a drive focusing them. called experience XXXX, build deliver a our rolled and most is the we have Hungry MORE work promise our food. with times. management, X stands how on [indiscernible] technology by how make delivery This product our our deliciousness sprints do sprints of in with food our was products make and on service. program These app of we and operational customers we service together to In program consistently great operations. product This more delicious our

X last our delivery fact, decreased In X years. minutes by average over the times

stores Operational around to operate. area our where strides. and made innovation an easier excellence is focus brings making we've also significant This

new we We've We've effort system than than and for impact out enhanced product excellence. much competency out XX% our consistency [indiscernible] team for dose stretching DJ continued U.S., thank X,XXX we to now at our be quickly across QX. operating it's rolled operational high our system a across in the found equipment have because our machines technology ways roll I to members. Demand the continues speed from to were more their more end having operations of want the on increase have team the the for where franchisees of achieve to our and this to past.

pride of point a is and Domino's. differentiation for This

more renowned and through sand pizza, broke initiatives XXXX. to launched inflation our back clutter delivery emergency industry we that launching tipping in brand-building several customers value from We bringing the for value are

value. renowned more brands, We they Rewards will Domino's and give grow continue will platforms. XXXX aggregator in on In are to Domino's their continuing customers through promotions, drive by national from to value XXXX, demanding what QSR

of value-driving promotion going strong and weeks it's of and believe year ahead be you similar challenging industry. another slate we a the have go cadence initiatives expect to to boost ready in a primed We can

members to for more and growth engage and frequency and Part We was members efforts. approximately users targeted of the users, who first bring million strong carryout to Rewards up the XXXX. drive our and $X.X delivering redesign. base Domino's finishing this XXXX light are purchases. program XX.X active allow and back customers of users great us of in marketing versus million year overall significantly with at has continues target repeat year primary personalized This the more customers will grew

importantly, is the part Uber, aggregator channels successfully providing And has our as continued we to through year other. While optimize of own exiting track remain of coming and strategy, aggregator value on tailoring focused XXXX, to renowned the the we goal expected, it X% through the this with of and sales In achieving our our marketplace programming one our partnership as further. space barbell at entered incrementality channel. our tapping offers value into with

further number In begin aggregator exclusivity a with meaningful half other in additional of the back in to XXXX penetrate to sales XXXX, us, in [indiscernible] platform yet a a have with our this largest know opportunity and ability intention impact of arrangement we piloting have the stores. channel begun that we expected with small year. the We've aggregator the meaningful to partners It driving aggregators is the with in negotiations are join we've in partners and extended our Uber meantime, U.S. for the

believe started. that pizza, of The are billion time. getting marketplace this we just fastest-growing represents segment $X incremental QSR channel opportunity is We an and over sales the aggregator within

system by as and secret enhanced of is XX Pizza Domino's In waiting team we and of their our remain we future opportunity. to a everything started have Every one member XXXX, Domino's pipeline they almost added Now to best-in-class franchisees a franchisees XXX new our the franchisees success. the sauce franchisees. these for new

more the laser-focused against In our for in hungry summary, we're delivering goals on U.S.

same-store continue market we've and X% developed, I to growth of Domino's capture deliver we gains to additional XXX This with will share stores. plan in With believe would U.S. along enable annually, beyond. more net new or the XXXX sales

fourth how internationally and navigating business. continued across strong now globe. Now sales of geopolitical of our a pleased franchisees International in macroeconomic years most XX showed has are issues delivered remarkable the same-store the growth. the We're quarter and shifting international pressures with straight our to improvement Domino's

create know what We continues our and with master team work markets headwinds. international environment in its challenging to their in even these to today's momentum franchisees Our works face of the value. renowned in

last around consistent carryout we call, focus These our and engaging messaging, As with on additional and noted from maximizing on in dine-in. are driving franchisees areas master aggregators key orders our X a growth value we're areas. with

In them. orders QX, a and this to and The their results we've this eliminating to through strong delivery increased good begun is news India, delivery sales. a tailwind promotion launched sales emergency Uber, focus. Jubilant some pizza provided see been that's in U.K. driver due their has with traffic has fee. driven Canada for ran an have to after Canada and that

for Lastly, a saw point, at business compelling pan consistent in price product provided carryout a increase Mexico XXXX as in pizza in their customers. nice a premium driving they value

And on in kind team. store same I that create the I want strategies, has our share message sales reinforce to we achieved closing, will Our past. business with international momentum expect produce net Hungry by to so growth of much and share same gains focusing market potential. In our the MORE for we've the repeatedly

tailwinds own will driving We creation best-in-class the growth. and in shareholders. and and value been long-term to That of our our results share how franchisees creating and continue have always be has we drive been business for

Sandeep. the I'll call over now hand to

Sandeep Reddy

good and you, Thank everyone. morning,

lower currency, by While was within and We by Income initially our in chain, to well our growth driven the increase were profitable foreign dollar as same-store backdrop impacted was we the as general than still retiming of than excluding delivered procurement which financial XXXX in lower supply in operations expenses, challenging X%. had U.S. which of despite driven growth sales increased QX, X.X% impact full gross was with profits expected. primarily a more from year results investments. productivity line we anticipated. administrative This margin by of expectations due

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

growth delivery These carryout year, sales X.X%. global X.X% pressure comp that from inclusive grew retail benefited In the total for of macro customers. from the continued mix Uber X.X%. which in competitive driven delivery store comps same-store For and updated X%, net by pricing California, was and which by low-income sales of on our with We X.X% digits was driven our down X.X% quarter. guidance. and the pressures approximately of was sales put single our up was The impacted high QX, retail in by in were X.X% sales U.S. and grew line

was Traffic tailwinds for Our flat a which by delivery. were by a a as Eve timing. mix carryout of that ticket higher lower partially headwind driven Year's partially slight a offset the carries result quarter, New in was

sales, and the to sales we For XXXX slightly carryout delivery of our The XX% because our and was carry the year have up transactions weight transactions of year, more our transactions of XX% in X.X%. represented represented of carryout delivery comp while XX% of of XX% The our X.X%. sales. shifted out of comp and strong full

at pressures Our in $XXX,XXX best back class. came competitive in in estimated result. the a strong average macro U.S. believe in is to the we of weighed combination and franchisee half half on impacted After sales store first this the which continue the year, our profitability start XXXX in that of approximately

QX added XX system and our We unit new to net Shifting in XXX. opened our count card. bringing U.S. X,XXX stores to store store, U.S.

were Our that year. some openings took hurricane last the of activity negatively late by QX impacted place

driven that impacted in our paybacks across their new Despite India strong challenging reduced saw excluding a driven Moving slightly franchisees was and fourth per retail broadly expectations our of X.X% profitability grew and In where result. store impact growth macro and by to the in XXXX international a sales in our quarter. by that the total foreign at and grew backdrop comps quarter, were came average international, as we average the in in same-store X.X%. This currency net of that store ahead slightly sales business, store Asia Europe. improvements their

also markets, paybacks are which China We strong continue largest see in our and to India. X growth

that global growth As line we look should believe sales ahead continue be XXXX. generally to XXXX, to with retail in we

Now color. to give some

that our be X% In with catalysts our macro in U.S. result to long-term event aggregators are could line pressure number. the expecting of it guide driving and persist in throughout put a We our year, as expected traffic loyalty. on this achieving pressures the comp

half the comp lower We the first in half in the also initiatives on the of be compared expect to that timing back certain that U.S. based our will

XXXX. We right the XXXX sales before continue we same-store to level in X% to believe planning more to expectation X% the normalized for business a in return international approximately is growth

stores. net to Shifting

We Domino's this. in and our to make U.S. do they from have Pizza is are year in growth Australia. pipeline expect the in meaningful Internationally, This need progress they their DPE, we to based strong their work stores continue through into out XXXX. due what continues line to business we DPE master expecting [indiscernible] in their have to XX-plus be plan we under to net to franchisee a store which with to achieve is primarily CEO. as our Enterprises, of strategic new into what

sustainable, by term. locations drive also impacts growth be additional stores, planning long that to from closures behind be as believe we close We XXX-plus the profitable their Japan. store prioritizing They're in openings they DPE's to that are expecting us We disciplined they the an where into in announced recently will can head XXXX. more underperforming for primarily new meaningful

On we today impacts supply expect exclude color in In approximately have tax. of any operating are the place. P&L. metrics on the to meaningful profits, growth are we the for within we products so of food if providing points we Any our this impact proposed excluding additional of continue U.S. most from A tariffs the X%, put of chain few not business, an a currency. to expecting source country, our are impact

second to half, digits our cheese the by be basket up We the half prices. be expect first driven are than food low expecting primarily in higher to increases single

are do our to continues procurement expand productivity to to chain that executing due continued the job We supply margins year-over-year on. incredible expecting team slightly an

to digital our Starting drive $X.XXX fund $X.XX fee at to our increased growth. initiatives We technology XXXX, future approximately to are sales retail of percentage expecting G&A per beginning X.X%. QX we by as the be a the of transaction have tech to

income chain supply margins. We expand are expecting operating margins slightly in driven to by XXXX, primarily

lower be expect half margin the of growth We half. year the first to in than in the second

a X% expecting current exchange income headwind of to to are we rates, be operating growth. At foreign currency X% on approximately

pressure current maturity to October debt in plan continue this We and our expense. year, some on would rates, result of interest it in for interest at

be We expect historically. of in with is our which to the to in range generally tax it rate line XX% been where XX%, has

can long-term the has and what achieve of changed. Domino's not algorithm Our the belief should business in

algorithm sales annual growth that retail profit growth of the We of and our continue more more X% to is operating one. expect X% or or global right

However, DP's and expect which the retail put global our XXXX. with anticipated profit impact expectations, now and from be XXXX, line additional will pressure we sales net in closures in XXXX on to

wanted with a dividend note our was I our allocation increase that we capital announced close, line morning, which To in this XX% done in priorities. to

an quarter. a repurchased $XXX $XXX average for also million the at XXX,XXX We approximately fourth price in shares total of of

on our As of the $XXX had authorization. Thank you. end million of remaining approximately share XXXX, we repurchase

questions. open for will now the We line

Operator

the of from UBS. for Instructions] comes Dennis line today [Operator our question from first And Geiger

Dennis Geiger

the the loyalty items the half to just prior Could I same-store unpack guess, bit those that X the specific half? lower new some of how first back in X more versus being drivers. in out? initiatives, comments I and years around about the high-level wanted for you sales. a aggregators called a XXXX those sales at particular, you're of And on guidance excitement to 'XX U.S. the commentary think ask around thinking with and product I kind biggest versus innovation maybe you

Sandeep Reddy

the first other specifically half think in partners prepared negotiating half and think back Russel's I the aggregator would talked I come remarks, about with that -- question we we impact back meaningful started the platform, on the cadence, more the aggregators. on potentially guidance the versus from the is, half So and in

a earlier in know whole shy them drilling of launched has I the in about you calendar. we think in so 'XX. we this of that ever, And it of 'XX, that's initiatives is weight. of quarter. bunch one I just best piece think we piece of terms marketing Similar deal our weren't And in other have you've really seen, the out plans a as it have bunch been

So there's to that our with. whole a competition more we're waiting surprise much

how more So that's front you to [indiscernible]. kind not commentary going versus details of I'm give the But that. half backup on

Russell Weiner

is, general, want by what think recipe I Hungry to in our MORE. we're asked in way, when specific And the to talk sorry, it's if good we're folks just to what when Obviously, us Yes. drivers you for But are -- business, morning, not going about information. know the give

to quarter, going I them $X.XX so came promotion. And we're if strategy to Well, best that QX, deal for a ask wouldn't more. different? ever the going for But of do are any someone you me example, Hungry of doing what's really out be last to in were in tell what idea

to are going are change. you for borne going We guys specific strategy. of your the keep on the need Hungry drivers So to them out But toes. MORE the to be behind

Operator

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

Brian Bittner

the which to international you range. long-term softer quarter's As in reiterate does expectations, with X% view established the still sales call. comps of this better international it prepared XXXX in thoughts same-store guidance, were I than range if it did that to have plus but peers. X% last over I'm changed We're at your XXXX stronger international last international your relates lot And instead of assume the X% of all expected. curious mean trends this your on several also for a remarks months. your morning, out XQ seeing you

conservatively to can or So you anything I'm just curious if else starting this add? possibly is tilt

Russell Weiner

results. quarter that dying things of some the with I'll of the make start the not I how pretty part am remarks, there, around you bunch into things the as about quarter. going -- a in I look When opening are international do bit. really through international again, of going having to drive a these to bunch a to sales. And headwinds And flip same-store world. We're as and taking to I free at it in -- we go Hungry We've seeing gave add. seem said, we're MORE think that. and beginning We feel the a my I my little of them in and X of We free for Like to well, markets, were of well. be to translating X Sandeep, after can examples value control. our down We're but not to competition for off gave we're we're some QX do renowned happy. pleased talked I'm

The first below or is making are sure that price CPI. our points at

the need is And making that driving to we international aggregators. just in Second in delivery, like we're the sure beyond we've markets. while U.S., diversified still third, leveraging delivery do

happy more information, So and we update will we'll we number, as know. let get QX if with you that

Sandeep Reddy

terms volatility in I in that's right sales, of on out what in macroeconomic very Brian, been that's -- QX wouldn't seeing And think is taken terms as There It call well particular, is now. of say still this all said into QX what there. both add, the guidance a I as we what of out there. tough lot we're consideration earnings And on will conservatively. same-store the I a in environment is

the initiatives have that the call. So renown we'll not the materially shifted drive last continue since really about, Russell talked to I but think value expectations to

Operator

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

David Tarantino

missed way terms new or target I on guess, was guess And your of assessment frame would XXXX. your pipeline be question of target the to My units great. number, any of, the for degree confidence for growth. you enthusiasm up is just getting the That I building to can I ask guess, in of your wanting I degree XXXX. U.S. in unit

Russell Weiner

What we've of kind in his openings. is net think we we Thanks, of a about done Sandeep talked where the relative year, year. happy some would hurricanes of didn't impacted to the also hit. remarks at David. really there. the even have pizza Yes, part essentially I just about the how maybe back in places, our competitive Otherwise, been I'm

number as far that of you we And our they add stores were net companies, than higher at several that. opened as look you if -- competition public up so stores multiples the and

all got we're in we've little a hurt do. But So game about. the what gaining Net-net, more share still to bit. us is this that's U.S., and more The hurricanes

Sandeep Reddy

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

against are the continues compelling. be hear stronger are much we extremely still in local actually well. new the whose build, competitors for continue are and The regional and share economics class. just And demand units players data a the Our as but not paybacks stronger very position with again in very about, for strong. best to you competitors to that The we national

is that pipeline So we very we that are the realistic. see super confident

Operator

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

John Ivankoe

of $XX. There's $XXX currently price large The topping $X.XX. pretty obviously for and unlimited obviously, lot been specials under a what's attention incredible around points

Mike, of but reason, a price point really some $XX consumer of around whatever around brand the them. the not drive price the really lot brand was number interest for whatever the around a So question of a $XX, can otherwise or a in promoting natural position the point, to that that $XX Pizza Hut constrain value, price number kind significantly might nominal higher has point. $XX cap nominal $XX, in interest be, might Is where higher getting kind where you

Russell Weiner

of a done similar and price folks of you we out this promotional for we Hungry and were environment, the MORE, we John. when a dive that in renowned one other are pizzas, $X.XX. value things talk said points. lot Yes, this about if had there XXX we see and emergency frankly, to And We had that going you'll we been important. is do. into set that [indiscernible] price knew have promotions We they've doing folks

and were sustainable. types able in points me, you we us, are. where the it's When for these is, with this not about sustain for sales Domino's our same-store franchisees, price saw to look at which talked of the before and players, they're line pizza for For Sandeep thing economics other

got to you've not similar same-store the and are promotions good. economics So lower be going if you got sales,

our to what or drive we've -- Domino's, chain, a but voice you down as the point costs supply enabled when ability of $XX is that. us our we're through of high the thing to in so look scale price that's to continue consumers us and volume big And drive share good at this our do got to pivot that of $X.XX interested that's sustainable part our going strategy. about is is keep to now. Domino's, right different through

Operator

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

David Palmer

investors concerned the had potential If are summarize the I there, from on they're fourth growth would I'd concerned the perhaps potential what out. long-term about, to excited they pizza But about excited gosh, about XP. delivery, what that back and of about the same-store stuff say of to about they're marketing excited expansion given types DoorDash roll these initiatives for troubled out and underlying sales UberEATS they are the quarter particularly think, trends from beyond the cross,

might What comp could beyond I'm point X% given that in or up things some this your terms some 'XX would domestic its things you at contribution think growth you So and thereabouts. growth perhaps think year. in wondering or of these give other that people comfort target that through when 'XX beyond do about that are ramp without that you of

Russell Weiner

could sustain to plus think you And to. it what's future obviously, of best this to Yes, again. bring If we going what strategy telling not got you we're doing QX what come coming them do I'll I'd a sometimes year the that team renowned the me, value. competitive them record would hey, said think what I want without a last in then you're of hey, kind This don't years that specifics we've of up has makes lot, come got programs. for track I of this our up that is, point But wouldn't delivered we've doing? you telling reasons, a answer question is were into what get track be and earlier, someone share we're getting ever, which in us you'd out year, but go particular into But a I has deal be ask record. X brand

been I've without the company the pretty so been track XX has And with years forward-looking giving record information. solid and this essentially us

we're want platforms expanding to one. the ones, know if you aggregator is what the a talked some big on about So big obviously, doing, of you

If right you about we on all the there. think 'XX aggregators, completely had been have would been you're

Our show doing bring going with like that strategy, Loyalty the program. to see a we've to you're loyalty first best-in-class a for But got a based are we and that gain continues of on ideas record is multiyear that. company our us, track differentiated

I'm into to programs or to it, specific names other our that get moving we've to say than Pacific going we're forward. So than continue say not to do to numbers done other and going

Sandeep Reddy

do. QX have into database, The now and we've billion we that because them at And the XXXX. from a that think of tailwind. comes And impact an more leading post QSR talking and we to Dave, that. [indiscernible] space talked And just fastest annualization aggregator segment the to about obviously, there's is about due there's think something backup, impact we Russell really aggregator the add about we then especially in aggregator. long all in pizza over [indiscernible] thing Russell's cool the drive growth there 'XX, the These captured gained. to impact, have them X.X out a on fully can we're the a I about here, the loyalty can when a like carry of members marketing If point, loyalty, looking multiyear users. talk really I specifically, the term And and Russell the compounding that things And we even to are incremental talked that about becomes lot weren't the and there's loyalty more huge light incremental think come start $X.X there. in from about and we to users that impacts. compounding platform,

strong. well. And going as about the very It's So big very mix this the really to be thrilled a carryout business It's is we're in flywheel. compelling.

that more the with loyalty we've growth gained number You members that come. combine of to

And drivers. the consistent so they are catalyst that talked are very about and we male

Russell Weiner

you why to to the we've some of we're scale able and we same-store what where in more competitive another right? chain. decade opening. have another winning stores, you on the got we've -- able you think there. I Stores grown been supply stores talked you that about scale listen scale, just over gets it's last is add the markets on building we're we're from year That to of over sales, voice, the stores where commentary So got when on if plus, -- year drive share lets sustain And same-store in winning sustain we've through to right, to sales, we've keep

kind drives actually and momentum for the All more of snowballs of that future.

stuff the has in the continuing for more we for becomes essentially us flywheel that said future. offense worked all us by this So

Operator

Our comes from Geiger line from of Bernstein. next question Danilo the

Dennis Geiger

think you're on the cost side. on as as the discipline paying you're some showing both -- also supply I chain G&A well very XXXX, in solid some

about You timing were some of in investments. some talking these on shift

can Or you that already us Do the guidance So put your investments have than have over that help gave to softer that opportunities that out a little optimizing the G&A? includes coming in still think all you you for expectations. room today in and you do still you the softer the retail there? understand extent which then been were stores have bit XXXX,

Sandeep Reddy

for question. Yes, Daniel, thank you the

we're good how of thinking business really I in think the a how it's and we've one pivoted. about terms

where that's prepared procurement agility to drive in terrific the we things we targeting. of fantastic And were helped us chain that, the the to productivity done growth couple [indiscernible] job. If organization. actually said from year. XXXX remarks, that a initially actually to really really And the income back you They've a And year that what supply of P&L a continues the try the beginning the we expected run. X% in found X to that operating at didn't go despite we was sales

through of that of expect forward this XXXX wins and on and capacity little specifically think technology technology, buckets XXXX going, capacity of investments on of appropriately terms way timing had of able think, built that if the in are to to there as as third look G&A. a part investments look make sales confidence actually I the a our bit, then And look little at 'XX But as have in the the investments pacing have based well. is about and different investments, had we consumer is, think do going, we're that in lot more we've I want it. the we retime When quarter in in 'XX terms to in sales think in pivot it we we store a what's at earlier We sure call, bit we where X the how I during we're that's to able we were I We piece, that. I of we talked we're with even demonstrated that investments, where what that is up, of momentum actually, numbers. framework

Operator

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

Peter Saleh

informs Great. X, year past, the when the UberEATS. XXXX what, I about the if it, of you maybe mean, X a wanted expand of to in third-party partnership have incremental differently call partnership exited how you Are from near X% do UberEATS to revenue ask still you'll I for third things target anything, $X you another end the party. learned And now on track on the by XXXX? you quarters the XXXX. billion that over

Russell Weiner

we're we as as incremental may of this The opportunity can. this timing $X us. and pushed for high purposely we to Yes, for at volume a being be billion have [indiscernible] that's really out on bullish have going is still manage because

get we on of the once so grow to we'll other platforms, obviously, there. And some continue

to marketing. the we've One Uber what of is things. couple optimize learned a think how I with is

to the about So optimize we've billion is may incrementality. kind reasons to bit I've talked to taking one how longer of the be learned little $X get a of

to incremental accretive And be franchisees. this our of not want and We to so going the away. over all grow profitability and volume the time after we're right

to So we better, were it doing platform do we've scratch. tech this how would platform another integration, I technology learned than marketing we if then on I on integration was would that that be the to think, just go were expect it and from quicker when

Operator

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

Andrew Charles

ask issue $XXX,XXX in initial wanted Meeting. to of December at about cash the the XXXX $XXX,XXX Investor store I level XXXX. target It U.S. the drilled flow

if renowned there? Russell, just shortfall conviction the So expectation, in to prioritizing value shortfall just you or sales strictly and profitably can franchisees given I'm other was also that versus the And cash some driver curious of flow? address store-level 'XX was to original the grow then sales franchisee

Sandeep Reddy

on I'll flow, start extra the first cash on Andrew. part the So

we So were the we quarter, and XXXX, cash I just in the and got on $XXX,XXX softness you half, pressures promotional of where intensity in of in started the we macro were we be flow XXX. a we building. look, accelerated year, and food half trends the that, you agree. the look came we were competitive of well to think really the -- quarter. QX, plus that the then of I the moved was I the expecting that we saw at fourth it, if kind and with then about talked second the And environment have into heavy. started on the into We at sales the X.X% third as intensity up And basket mean top store went expecting. year, first we're it tracking tracking. profits when continue weighing we we finished as candidly, comp sales in But And

that the is flows. the didn't happened All that cadence explain either. in cash perspective a from what of So cash of flow terms actually help to

about grew However, and the the which year. the thing, into by is forward take you membership, market million. this loyalty market look point $X.X but that grew you of was in 'XX. And then growth, share critical, critical, really that take important And share you we

terms we growth only in it's into of but not have, the continued digital, whether it's in whether in to of drive catalysts With scale the I growth, lot have in a chain 'XX. whether share supply move marketing, we we as it's think cash side, flows, overall, that in

Russell Weiner

add pretty and restaurant Yes. special. business. being because And And long for any is they're their are this of business. invested don't This that, They actually, to primary guess the are other chains. I franchisees competitive they it our their Andrew, term I'd folks They're in in Domino's. fully run

And so what apologize, they the higher for us, right, promotions, XXXX saw this of year was higher I'm but sorry, share this some with higher us, year, I sales meaning us. for stores for in similar was competition, XXXX,

talking say the promotion, P&L impacting looks not best profit this lower of where sentiment. one you're about it the deal on this things long term, a their me for the they $X.XX the if actions own quarter, they your what you is good they're if well were volumes. like the I'd any holding thing know competition, approved this and and was in because that they on things the And so negatively know you're that's just into franchisees ever. are knew going so talking with And

is going signs The And see any you growth lean wouldn't similarly, -- with growth. ever to qualms market. And deal in to there. had if literally so they're our in, store they best what about continuing are store

So it they're delivered a Domino's year wasn't think the Pizza. XXXX would. -- where was we term. front term, it But was I long in of we we in We're certainly long in it win it what said still for for

Operator

Our from Citi. the Jon from next question of Tower comes line

Jon Tower

you in headwinds Australia facing could unit and franchisee the But have do you in-store over speak that into the see 'XX? in to where have potential I any you the will for you you -- global if reaccelerating consolidation this in And master specifically, or the could and curious the was months other XX closures next so? closure. confidence from franchisees potential international growth the a master bit little business be market maybe just 'XX what dig

Russell Weiner

They're you now I China and stores XXX growth up year, opened to will What talking India think the and largest behind X focus the that start of I I be on DPE, by end XXX XXX I think those XXX. Look, the remain continue. closures want track. us. our closures to make [indiscernible] sure is markets, everyone by China last year.

strong, of the system the by add? behind I growth the the end so Anything DPE really closures and think, us. be is will the And rest of the in to year,

Sandeep Reddy

the this be outside DPE. well, XXX-plus to compelling on what I they're slightly when I DPE you outside we're the and stores close about profitability by heard Russell CEO very you've probably talked DPE from from and paybacks focused prepared and China portfolio And in of the at the about The look are I very about. on talked Yes, that talking the in just the good commentary think China are their portfolio. profitable, marks, store India will very as organization paybacks we're looking of the in portfolio that that being despite they're to the about is But DPE, obviously international to talked improving that all at year. improving actions very, of sustainable say I India prune think their the is going growth pressures

leading So store we're right and with healthy for of what because definitely at looking well and the all very invariably, very this. indicator growth, beyond economics of we're this all is happen be are growth. XXXX goes going the think I unit of And to part going the to on

Operator

from the Sachs. question of next line comes our Goldman from [indiscernible] And

Unknown Analyst

your think structures quarter X/X roughly dose stores in still X,XXX obviously I the you of end So of at mentioned fourth in is the U.S.

metrics store more of So to share the inhibitors are the operational And impact key a like can on you accelerated some any that the I'd understand to rollout. what overall on efficiency?

Russell Weiner

more now, is shifts shifts. them but on long, that [indiscernible] really don't that just Right have X than to with kind new about that somebody means we're think just it, don't supply get the that on that's higher I'd usually, X it Sandeep's is speed call ramp to takes just trying stretch is me it's of we the one point I if DJ, it's the like of store why do the And sure. supply board, impact and even up bring demand working Yes, on XX thing letting to -- we is competency in to say shifts. is to

stretcher and one take better and was dose of -- back what I just did, step to out to coming understand really want of guys the make got So is we this said, do is COVID, we're doing. get we you what we at a What but piece sure it.

to have our physical of both but technology. You plant, operations, the circle reinvent also

things. on TMUS of concentrating is our programs ago. turnover One secondly, which by operations, improved then We years X straight training of last look done, summer in had at a is service our of what have lower. improved And a franchisees. year, couple had years minutes. so raining. is And MOS, operations, Net-net, that's you our our circle we've stores, we delivery of And [indiscernible] times of couple reinvent

a got if that of and makes your circle your think So members it team for I better that's you've operations new a delivering to better customers, win-win. you're

I an DJ, So but and the take years I to back part improve approach say, was overall of the just about want we've a X know is operations. question over step to had last

Operator

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

Christopher O'Cull

on And entail kind e-commerce just rollout Russell, new the new and this the including more following of these you expecting end from then side. you business provide Can what some both the rates of side? meaningful information a then and a you also improvement back app side year, those a platform mentioned changes are in changes? conversion for will consumer-facing

Russell Weiner

Yes, Chris.

how about So the doing we're let to rollout. you me talk

last you it about kind First is We of what That's the conversion. talked building sites doing built. finished And now. we're year.

is do And we letting site. showing the huge obviously. that the then the order more we'll what so pieces positive, website. on that. conversion change, are go are flat to is This site, if to things there and need And slowly we roll and we to more It's that back on a people we'll we're fix

so conversion loss of an issue. X.X% is And

a of most level what I will little should is at it food continuing this the If see than way. year. a already out delicious new a sure time. of I Probably to fast of the the were all we we've takes it be can to consumers right later couple in pace what where a up forward website, support we're rolling this mean at XXXX fast -- out long taken photography this out food see, a going user to business so things I'm all old big a their to about are business we're changed. of some but so of on highlight be year just intuitive. we be eyes was we've A bigger the that. steps to have developed will frankly, in the is apps the And on bit is as among much with ago. just and people are lot buy website. than and The A flow have. the other it things -- of when more apps, user we is things that A things lot we flows we our carryout layouts app the the are didn't lot -- and brought make was were much that original website. first, But common excited of the Also, time up

And This that the so all afterthought the of when be will we're of in first that when the an this. there website. -- a speed, confident about is back then systems, our personalization, be you new about And which our reason on was into end, talk talk talk website, won't kind about great in integration you carryout do about experience. we

Operator

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

Brian Harbour

much do this is Or delivery gain Sometimes contribution, implied you've XXXX. still of And talked pickup going some where that sort consistent across I that, think as in share. softer kind excluding earlier, into Is too just to? change year? underlying a there doesn't of was I Was is of is point your And there? expectation right, obviously of kind of the those the spot. versus both Uber business kind guess you mean that delivery about of carryout kind

Russell Weiner

Yes.

in carryout moving balanced gains share to to market and think the continue going delivery. first, we're growth Brian, And forward. we So have were both

a switching bit to XP about You're softness there, where was right eating home. it's the little being at people

new. But is all right those value obviously, into marketplaces for that, now world. new. are into XP those consumers tougher value-conscious a is get this Once delivery so us we And in

choice And the isn't restaurant though most eating it's at another home. time, to the going so of

Sandeep Reddy

something think Brian, which important. I And ask think this, didn't up but you is I specifically you brought super think I

and delivery about we think we As balanced between expect 'XX, growth carryout.

And you're growth think important balanced putting continue as very transaction between ticket your pricing. on disciplined as super actually to to And expect that's together I we models. will think stay about We well. and

pricing. same taking I the 'XX. disciplines of in low expect You in were terms really actually in pricing saw of the in single we the digits California, spite 'XX in high single-digit in much pricing

So value and advantage our share. market drive renowned we on continue to more on build

things Yes. delivery especially have I said is the Brian, we're the forward, one on on business we're report the to -- our is, all of to going delivery delivery how should well as going when platforms, that's looking business.

want transaction some profitability where we're good is meet delivery a this and to it's way the on We going customers. to And be, if where of you want going And these a channels. be are. is XP to in we consumers managing to if Our XP. for way business they priced be they remember profitable franchisee

how in start the about So though, as questions I the of thinking as understand it. would That's the approaching half back business we're delivery X year, I on business. really especially our

Operator

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

Lauren Silberman

For the question.

So it's stuff to cross soon. plan been reported you launch that

I timing whether willing think and like you're it in specific may X% expecting first us so. contemplated the this in being a confirming what most how with sounds And that LTO expect guide are a partners. half next softer. high-volume month on little be or I the investors not it in you balancing the guess understand LTO. about potential additional delivery point, you thinking you to the the But help is can already of

Russell Weiner

questions few A sure. there. Yes,

talked do a you your we LTOs, I'm remarks. saying LTOs. sentence, general, with in about of never we'll lot innovation your I but question, do talked opening in my work. I think first intent about first not

something, long-term launch term. you keep the is desire to long get to the ROI, need same Our when we

in launched end, York you by we little a that And couple while then we in pasta New SKUs on brought what a year with took Cheese, way, of we that Pizza, brought keep the if that a Mac we [indiscernible] us up that Style clean And we with pasta out news did we volume news of look business So last XXXX. have. at to the pizza helped didn't bit. &

and out or we biggest there, don't stuff #X We the look, believe have do one the types of not, company don't states. not [indiscernible] pizza it markets. who's first it's we're We and it in And in it. it cross other have not asked person in have the You're the surprised world, of how the I'm

trying then, build things. number through So the are or we're level. of to all aggregators last what's putting it's One we operations, still And is you're to were of at circle it deal our future to to products. I question, two here, capacity is level. you think at orders with say, changed it's you won't operations, a with maybe going through if think but guys, hey, that? not way the about going which during comment say think answer on volume COVID, [indiscernible], of Number whether to that we've to about your our of on I new products look is is more a couple I got But better again, go we since much that if not stuff. your

a ever had more we've volume been dominos since than still So I've there's upside in here. efficient

Sandeep Reddy

specifically what's said you sales asked because same-store Russell what add the to And Lauren, guide. I'll in just

So a couple of things.

I was meaningful think aggregators, in prepared the expecting more half. pretty that on remarks in we're a it impact clear the back

of have they're that's about talk what is that a guy included that think we And because we expectation. same-store yes, we're I So sales competitive same-store X% those going part from guide. slate of apart our reasons, initiatives in that, to sales for in but all the and are, know the

Russell Weiner

products X to we're this will We products new year, including do year. and said be new every X X going there products. so Yes, new

Operator

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

Jeffrey Bernstein

you to wanted to positioning that on comps Clearly, the 'XX like -- there's U.S. in lots pizza about. that talk versus most assuming of speak segment. the looks quarter. X% the basis And XX renowned points Domino's value QSR you're it like already recent within about I focus in Great. reach reaccelerate the [indiscernible] value the in looks in

$X things: meals. the those time, maybe both tips. value eat pushing And So think of your QSR of your is would think at into One, value the your I'm aggressively it would when about delivery you leadership. I I competition business, just same the with things surcharges two wondering, think is about and side

the in non-pizza XX So the just thoughts challenged on broader they pushing talk segment's whole your the value about a hoping were resilience XX, QSR months lot doing than macro and more you a ago. could delivery is

Russell Weiner

way it's value. the about relative value, Jeff, think I

And delivery so relative certainly carryout, in ourselves is expensive. to more

our the other for very look when to the drivers. really you fees items delivery, the delivery down you You hopefully at get delivery to only got competitive But fee not we're pizza, tips delivered. and but to still, price other

lot to your If $X.XX getting a two of each, house, delivered delivered slices, about you think a that's you're your XX pizza for to people. house pizzas feeding

when carryout than and little being we talk our lower choices. delivery with value value to income so pressured, other a And about is the customer, more compared especially it to it's delivery

Operator

from question our And comes of final for Jeffrey the Haskett. from Gordon line today Farmer

Jeffrey Farmer

your on to touched over terms sort beyond cohort have of through some the you expand do cohort? isolated expanding in might to income. that lower last income been as of that a demand for bit that weeks, of of the see the of you just it, the lower had the are largely with XXXX, just move How beginning earnings demand restaurant headwinds lower that calls You most suggested clearly little income but X peers XXXX beyond headwinds be

Russell Weiner

Yes.

but to think overall for XP talk couple things. But the XP there's talk cross really then talking think just us, within mean of delivery. be I seems a cohort of we're seeing the income Domino's, on I dynamic. a -- was is about business QSR restaurant. I about I pizza a happening more new about I'll what larger be pressure if and I'll

switching. heard of about down You've kind talk me always

from expensive or with pizza, a talk home. what go down in into those than dine some QSR they as starting casual other little about affordable in to always be options delivery, as I'll in gap out may me at lead customers maybe a when pizza be. fast maybe is than But it you're a climate, big The the And as maybe especially is areas see we're continuing consumers now, and gap up are that happen. So you've that's the which tougher more What want let's right, that heard more point, call of see pressures economically, dining at parts switching, to more then such or options price going QSR so other QSR. isn't less versus expensive QSR used gap, bit burger price say, where between, maybe to casual. switching, to

pay a because saying, bit occasions little or food different know willing to a maybe will bit more the the a hey, what, I'm can be different. be be you is customer going little And so to

maybe And though, so value, there are the but the lots the switching out now of down for end dynamics with way up a call. this customers, to they're is we're Clearly, switching, following the that looking good switching.

the going buy every to pizza and mix our And in right we of to our term, about get us. part buy something Domino's a they affect unique it. the we've those is price. the I with customers value don't is the the strengths, thought really long can of Pizza not this you match. marketplace, more What do when think single I have if value And have are And all XX, folks then is that years. It's think value into frequency just is doesn't think keep something that because one something we want have, one their platform to value. by I we that I that as a a it's at If restaurant. XX there want that? for at mean [indiscernible] think team and the of of not things It's As customer that's value don't had a I that's for to driving item. item, start having reiterating to certain customer you

have long our what strategies So brought I that's why really I think like term, forward.

Gregory Lemenchick

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

may You now disconnect.

Operator

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

You may now disconnect. Good day.

Domino's Pizza (DPZ) 24 Feb 252024 Q4 Earnings call transcript