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DPZ Dominos Pizza

Participants
Timothy P. McIntyre Domino's Pizza, Inc.
Jeffrey D. Lawrence Domino's Pizza, Inc.
J. Patrick Doyle Domino's Pizza, Inc.
Richard E. Allison Domino's Pizza, Inc.
Brian Bittner Oppenheimer & Co., Inc.
John Glass Morgan Stanley & Co. LLC
Chris O'Cull Stifel, Nicolaus & Co., Inc.
Will Slabaugh Stephens, Inc.
Karen Holthouse Goldman Sachs & Co. LLC
Alton K. Stump Longbow Research LLC
Gregory R. Francfort Bank of America Merrill Lynch
David E. Tarantino Robert W. Baird & Co., Inc.
Matthew DiFrisco Guggenheim Securities LLC
Peter Saleh BTIG LLC
Jeremy Scott Mizuho Securities USA LLC
Stephen Anderson Maxim Group LLC
Matthew Robert McGinley Evercore Group LLC
Jeffrey Bernstein Barclays Capital, Inc.
Sara Harkavy Senatore Sanford C. Bernstein & Co. LLC
John William Ivankoe JPMorgan Securities LLC
Brett Levy Deutsche Bank Securities, Inc.
Call transcript
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Operator

Good morning. My name is Marcella and I will be your conference operator today. At this time, I'd like to welcome everyone to the Q1 2018 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. you. Thank Mr. may you your begin McIntyre, conference. Tim

Timothy P. McIntyre

featuring Marcella, the call you, quarter. call final and of hello, joining for Today's one the be you Thank will Patrick today first Doyle. everyone. our Thank CEO, about results the

is know, you of that investor members audience, for you the mode. event the refer and media made, forward-looking others kindly As statements in find X-K. release in primarily that In a unlikely I listen-only ask our harbor safe statement any are call this can to all the so to morning's be I the you this and

With will As I'd it turn to Chief we Financial Officer, like Officer, CFO, comments Lawrence, over Jeffrey start always, questions. from Executive Domino's by Chief that, with prepared followed Patrick to from and Doyle, Lawrence. Jeff analyst the

Jeffrey D. Lawrence

you, quarter, first we for In and our continued good again positive our delivered Thank morning, as everyone. momentum results great once brand the Tim, shareholders. global

industry quarters lead consecutive international the We sales U.S. comps. quarters of XX XX of with broader continued and comparable positive positive to restaurant consecutive

store continued at also our count increase to a healthy We pace.

quarter. we grew by the favorable number same-store With results Our let's excluding look driven sales, a stores currency, increase sales sales our in $X quarter. a prior-year Same-store per growth comp, in impact When growth increase retail This grew count share Breaking by order growth. XX.X%. quarter. the which increases franchise the X.X%. XX.X%. Both a company-owned positively by lapping total franchise the driven consumers division share, an domestic continued sales was to our take for and increased offer as which sales Same-store the opened Ticket company-owned global were respond of were division XX.X% average down of up business for increase grew retail lapping domestic during financial worldwide, QX. primarily or X%, U.S. also earnings our the up stores foreign stores global retail brand international during of of an XX% Global traffic grew the X.X%. them. and was the while of to experience sales at are prior-year for a comp the increase growth X.X%, closer overall over at diluted is X.X%, was our that, retail prior-year sales the

international the regions with front, quarter the Asia-Pacific geographic were four and our positive On all way. our in leading of regions Americas again the

quarter negatively As approximately as to QX the half include were were I mentioned on call, back shifted compared our a positively impacted quarter. calendar globally fiscal comps impacted the Day. prior when QX year, New in comps that as this favorably not our XXXX That point Year's by did

opened first are unit domestic the XX in consisting we report count openings stores the of front, that quarter, to On X XX closures. store pleased we net and

over strength added new in of and stores enjoy the net stores months, four-wall net the a comprised last store total basis, XXX economics On division international and the openings and franchisees new Our XX net and XXX closures. demonstrating XXX XX opened stores clearly outstanding quarter our company first we XX globally. brand during broad new QX,

were quarter. revenues from prior-year up million or the $XXX.X Total revenues. to XX% Turning

the the adopted XXXX. As a of accounting quarter reminder, we new recognition standard in first revenue

our to on required P&L. expenses the now are we our result, to the related not-for-profit and advertising a gross fund report As franchise contributions

now increase an included $XX.X our had resulted remaining did million in used result Domino's $XX.X operating no to amounts this be in primarily quarter, net or revenues. corporate in available Although impact restricted revenues although can reported It following. used general is only from funds in brand to these to and consolidated the our that first The the important be in for income are not note support our it are on purposes. the P&L, million increase they are

volumes, that driven U.S. chains are store constant supply revenues. higher by First, higher growth, strong food supply resulting chain in

dollar growth store higher as revenues from revenues increased international and as our royalties versus from fees same-store Currency in certain positively domestic $X.X weakening increased foreign resulted changes the the currencies. as to sales, company exchange higher as prior-year by of higher franchise stores. international stores, well count sale positive and Second, quarter rates. store royalty count revenues at million currency impacted rates same-store in royalty owned due finally, and impact well exchange our the And growth against

to operating on margin. Moving

margin the accounting company This mentioned increase our margin, remained operating margin revenue domestic labor guidance, pressured revenues, previously. global XX.X% I new franchise business by the the the our a operating entirely benefited Growth chain recognition from quarter. to delivery in negatively for from increased supply consolidated both while on franchise XX% recognition As was revenues in of the overall advertising resulted for Company-owned margins costs. the P&L quarter store quarter. flat percentage from operating prior-year of and

recorded shift investments receive prior-year Let's including This our to technological franchisees, as revenues. by resulted million in now quarter. to increase $X.X initiatives, investments are from partially franchise primarily offset and fees the note that e-commerce G&A as which these them. increased that compared from the support that teams are cost G&A. we Please our planned

domestic also revenue line franchise with domestic will Related revenues new the line in new and line item. were changes, note in advertising advertising. our franchise we related included to been costs. expense operating change. in P&L, offsetting now costs the guidance, expense previously you expense recognition called our we to reclassified recorded showing item quarter, an franchise domestic equal item the to our In that to of down Due in G&A amount have first these advertising are Moving new certain advertising million $XX.X to expenses a this

full-year a XXXX year, to of for outlook million. item will the for we re-class range our now million of $XXX G&A in this of expense our that the be result As line rest estimate and $XXX the

accounting an note be providing we changes, expense. not will these on As a on franchise domestic outlook advertising final

increased quarter, prior-year in partially as a average weighted the lower primarily by expense result of increased income from offset down a was quarter. first borrowing to $X.X Moving compared XXXX in X.X% Net X.X% of net the This statement. our rate by debt recapitalization. interest as the million

reported resulting effective the legislation tax XXXX. federal at rate rate. equity-based on percentage tax also an for quarter. point Our benefit first in lower an X reform to reduction $X.X resulted in was tax tax our the in provision the resulted of was primarily in XX.X% impact due taxes. decrease This XX%, quarter our million for federal of enacted compensation income rate end effective The the of This statutory from

continue the We to equity-based compensation, impact our will tax expect that to XX% rate, be XX%. excluding of

volatility or prior-year continued tax compensation. you effective XX% to We add in the also was our When rate, up it all over up, $XX.X expect income equity-based net see related quarter. quarter million, our to first

Our first versus $X quarter diluted XX% which increase. a EPS year, $X.XX share last was was a

that equity-based the related increase effective benefit $X.XX impacted $X.XX Here positively to including our of a diluted down; share rate us positive a a tax primarily $X.XX, is on as tax tax lower share compensation. counts, by positive $X.XX Higher Lower impact balance, benefit royalty currency by breaks most impacted higher reform from $X.XX. how improved result by impact and impact including net interest $X.XX. from of And by on negatively exchange from us $X.XX, benefited net debt our a us operating rate benefited expense, $X.XX revenues. importantly, foreign us repurchases, resulting a results

the turning cash. Now to use of

shareholders share. first per purchase quarter shares to dividend. share Subsequent During price $XXX quarter, returned the for in approximately a first retired quarterly the an at of we of and $XX.X we $X.XX approximately to average repurchased form our XXX,XXX $XXX.X million million per the

approximately purchase in of continued $XXX all, shares $XX.X and our strong share. are pleased quarter. All our for per We at results also repurchased an and retired average we very approximately XXX,XXX this with price million, momentum

to I give transaction. it completed turning our update an recently over to recapitalization Before on Patrick, like would

receipt million As recapitalization we for $XXX announced, proceeds. increasing have a pattern the with in of which gross our has company, the April previously The our been match growing years. consistent process many XX of in to on recapitalizing closed business, transaction our leverage been

We are the our are a and community be investment of deal this business the new on rate brand. well that lending paying community. was by And in the our happy good reflection very debt the to confidence report interest received we'll

some about structure, a XXXX; XXXX anticipated pre-tax an an in repayment with million XXXX. tranche securitization this business notes rate, of to deal, issuing repayment made date million whole X.X%. up of approximately included tranches: tranche which basis, the interest October rate, a a of a on blended in advantage the X.XXX% with rate X.XXX% a and new Now at details taken rate coupon fixed at date July coupon anticipated these transaction, carry following On of of a again which million $XXX was has $XXX the notes, rate $XXX

well We future. the locked pleased debt in into have rates additional are very to low at interest

to QX debt-to-EBITDA have of the is Our $X.X million stated principal prior end X.X to equates X X using year. from deal, approximately times the leverage to and year, per our range. scheduled XX-month approximately each times now XXXX approximately near of X.X X% ratio previously- which times, trailing principal EBITDA top The notes up of payments the

and transaction Use With from over prior expect balance the retire consistent in million XXXX these business, momentum of include scheduled will existing the place leverage fall to the term, our which payments and medium ratios practice. take currently rate notes on five-year prepay to tomorrow. principal outstanding $XXX notes, funds we our our our this with fixed of

$X.X on We the approximately related of and paid pre-funded approximately principal a for XXXX also our deal the expenses of $X portion to notes. interest fees and million million

for in term. factors. is note $XXX change will basis. use decide to another be full-year among note and changes $XXX of we that I it very proceeds Patrick. $XXX over expected good near interest variable debt, estimate our One of expect approximately currently We and million XXXX, estimates current company. is pre-tax recapitalization, variable on the a to these It currently million to expense our with between to in the that, as-reported on refinancing last under borrowings may that All of rate million due on to all, important turn transaction And the expense in notes affect remaining would other interest the LIBOR funding for that the

J. Patrick Doyle

for long-term learned more with with I'm you the I've spent the Domino's gratitude analysts great interact approach job ultimately morning, your good strategy from have and along to in time, who and a years. for on we all couple know belief want over how believed today's time want still this and call, the us our months, the in of It's generate towards and sell-side And our helped get want many. understanding returns. and the the to fundamentals. questions want It's of for and shape my I to been approach amazing to also story being members, of our make while team to take leadership to organization, to us been Jeff, Thanks, great way. second-to-none great opportunity in tremendous investors of as collection many long-term public final members business incredible by the group stores President shareholder franchisees, to thank I care your the helped challenged up our and the industry-leading team, who all customers. team of observations our people they've global thank and I the in corporate I take that our over thank this of you. CEO begin everyone.

to leader, good do time major brand a past skills to talent, you and I to on in incoming couldn't better who as be reason Allison our months is the and me will transition, and Rich who great represent touched to friend, a bench he an forward. for few a I've perfectly. the move of ready move excited smarts deep I'm an in no of it's outstanding leadership And As when get the many and beyond months. culture and person have for will the on job. CEO know our business prepared deciding discussing our that coming for doubt more leadership his he's

in landscape. generated growth particularly discuss to summarize You the will a delivered, but of There quarter an XXXX. many noting, questions we've delivery in delighted To delivery way. regarding face received and in intriguing moments, our worth quarter, current in few of during first hear was you element every to of first, and significant our that's the quarter. with We results late we outstanding we start delivered the from Rich I'm the

in more demonstrate, see our retail our as sales this very known decades; those economics aggregator QX, viewpoint as was of confirmed. our we While to seemingly both succeed delivery I our carryout and has delivery from delivery past carryout continued the within impact space continued we and making delivery, past most between community have little six investor growth remain generated our significant which outpaced the delivery. has opportunity for absolutely And Simply, third-party remain on carryout third-party likely couple almost than industry our business strong results over first but the grown, for particularly quarter. several delivery of this carryout see is growth grew well more Part and hard. a and attempts is have consistently prime something are quarters. overall strong Delivery pleased growth, years. on to this to faster becomes to for We and realizing discussion challenging reason of business, in aggregator in as the of assessment incremental committed delivery as have our the our unproven,

confident fend off the platform expertise continue and it most While who of our to for competitive ability for the space best always to affordable advantage in we perfect, aren't attempt remain experience our to our I'm committed franchisees. to and offering by customers owning those play our in of utilizing ourselves

view profit comps in will to pleased And unit strong best the segment. blend long quarter see fortressing the and keep our The the to up term kick was growth retail chain the with returns things; importance XXXX. markets tremendous their be the definite for is to growth way investments result Domestic but (XX:XX) through our stated, is growth. generate and highlight technology Clearly, This continue growth. the franchisee continued strong their regard from for a we both retail sales store seeing as and within to potential sales particularly to in businesses many sales performance takeaway in a other maximizing and business have through the I'm areas major leading promoting sales superior such growth, long-term that performance, to focus strong, and our first as off same-store franchisees, on to growing same-store a and the of supply such

CEO to get I quarter, the the on take I into a Before Rich further next at over the to to turn call want specifics Domino's, minute Allison.

Richard E. Allison

today thank leadership entire appreciate you of on a simply is main I on to to me minute behalf remarks Patrick. some Thanks, allowing thing The call for say our today. quick I you want our do team.

to and fill, to have to Doyle leaves We the to work Patrick, Patrick with a a step from am shoes business. to our is, are is and around the leadership the learn or the big tremendous so to about excited entire such of goal, extremely feel this and a and over very excited also you. without your our years. my to am industry. you eight talented I lead I performance. tremendous opportunity for our of Patrick the company, much our brand brand grateful call, on, To thank momentum to carry such and And start take overseeing look opportunity quarter this future. forward in that I the you into forward debate, had question so for into the the while top friendship on first those CEO phenomenal people. It to past collection to personal role XXXX I prepared incredibly

know to throughout and look and XXXX earnings first my to addition this I half getting of many to meeting forward back the better you call July, In of beyond.

Patrick. and great turn I'll back with with over So that, it appreciation, to

J. Patrick Doyle

am to better to Thanks, it. leadership. here continue under your confident Rich, do are even appreciate I things that we absolutely really I around going

specifically, an to very XXXX. comments, pleased with and So outstanding our domestic continuing am quarter on I start business my first

Rich second inherits most on are to a Domino's who smart a and sales, the winning brand related I what to refuses to just strongly trying people system. U.S. to This miss success build its will A rest commitment is and of is Their commitment believe past none. energy in give edge, inspiring. continue that franchisees and is success. to complacent our as truly with be One as accomplish service a of to continued of relationship and the our group we helped and things franchisees. growth their unrelenting group or

with faster success our This succeed and us investments their a a on future new franchisees system to that profitability allows as way alignment is Our to focus as we the advantage make of constant advantage. can company. and alignment and only our move in areas competitive take opportunities generate

to delivery meaningful as serve that near the delivery long our to another of of continued Hotspots are only will helped convenience, firsts order technology technology a on think Domino's fact announced could vital drive now a rather Speaking the This investment, traditional another convenience; just sports beaches, making to advance learn more a to store the in managers are to profit visit store-level recently to and ability a sales which a Hotspots our website of by should be week, to digitally. outstanding mean continued not Domino's. something from focus franchisees, sites sound about our of spots to could Hotspots us take we for forward-thinking on address for XXX,XXX, pizzas in industry-leading of redefine all incremental mission artificial We teams exciting, to to and anywhere, their last of highlighted order this all aggressive believe are by quick you but game to not path all we customers DOM, operations, process not be orders via technology. is other service space; orders to This from on ability work just very other list I'm official and program term, game announced without the Fundamentally, generate and thousands, step platform. assistant. intelligence, to within proper virtual unexpected innovation yet advantages, a changer note orders urge our only terrific is execution great take store-level we experience, fields, our we've continue we which also is now to now will our so efforts the which places, will making us announced customers. the our participation The developing and allows Enabled nod proprietary our big will our allow pioneering deliver great and in on changer hyperbole, adds this it and could locations. our drivers. parks, thanks at by On the to our exciting it top a on better Hotspots, level, another innovative, growth, and category and giving anytime. ability Doing yet customers. customer but almost area and phone investments in

quarterly sales the end to performance strategies our continued line designed count solid promotional I perform business international driven performance of more the see to off transactions. grow top very the and like markets On I'd to performance front, range, pleased same-store our with initiatives to growth more our get the international of by adopting India start. highlight very at well stated to with order business. year a the be higher was recent completely to and Within business, our

at them another time that As also the the the commitment struggling. same market to from major reaccelerate reaccelerating India; in our store in leading recently sales the Jubilant you've their to competitor and one growth this master heard left within has is India, market is of FoodWorks, franchisee

forever. we X-plus closing lead X% In CEO remain outlook over years be great been I job things. bit to international slower we've my this and this CEO like three net will brand. QX, in of proud even unit openings. reiterate but X% the for confident accomplish. to to took to this in able past I'd appreciation I usual opportunity two decades the as the for I to am amazing When were openings Rich, organization And long-term to I I Our our for in a than extremely a achieve pass with set unit out what of Dominoid as role

Domino's provide our the to best customers. better for return franchisees the our in wanted creating First, industry the by I experience for dramatically restaurant

the become person Second, this in of company I and leadership a I the was in wanted would and CEO lastly, but the to our forward. one get Victory make my that is confidence culture. would set franchisees, ready it to a place and who ensure in end bit team this that and be the to goal, complacency And done. clearly to each the When will business little every take last have world just this left brand here the our single leadership decade. day, pizza number doubt But works succession it a one within strength little stretch, by lasts just No exist me we rest. better every and this beauty of organization. passionately don't

the leader, team immediately clear, and how Jeff. to as time for shifted step strategy became it and now whole dominant there of mind me Russell, or it myself, is discussion it phenomenal become so it will the you this truly will on the and to to culture and the and interaction Thank I Rich, to we're it number As open that we questions up very and category while phenomenal And franchisees there, the take in gets all was wait miss will. to going to sidelines my watch can't the brand, daily we much With there no more phenomenal team, one. the Rich, our with aside. than team, from for I on get become doubt for ready how share

Operator

from question the of first comes Brian line from Oppenheimer. Bittner Your

Your line is open.

Brian Bittner

all to know here only a fitting get of certainly go one we're years. over so Good bang just you. you a morning. pleasure such Patrick, just that with you Thank It's heck run you've it's It's been a had, you. out been to And, and the to going congratulations. miss

J. Patrick Doyle

Brian. Thanks,

Brian Bittner

of couple questions. A

do diagnose and in and reacceleration attributable to think what was this first now of most is in view, quarter you fourth the back able are you've trend you better biggest that what the or driver further improved to Just look now that this seen rear the with slowdown the quarter?

J. Patrick Doyle

was mean, New I I better. Year's into and fourth continue first what is, Day a point of executing half good. even so better a that would of there's bit into and guess quarters first, even very but clearly, at it it, QX half kind got first on in Brian, a But point level. a with bit darn a of more plus was Yeah. pretty and point of the pretty at say They I swing were overall, shift We right that quarter there. kind so quarter are a a our or happy remember of all, a that. high QX, to if you look do better stores out

loyalty continuing I the in think accelerate earn is Our loyalty growth program. to anywhere program and the

quarter. about advertising number has time, our the fourth an big quarter, normally, the lapping particularly it big first And you effective think and the been talk we're I at in remind one. to a laps, in not we particularly I were incredibly but would going that was

be I X% think come quarter, more to going the think top is obviously first day, end We at that but in we're were in the our really are the not. and the guidance So things, often happy than we to of where of the X% comps. over that's on those the to

Brian Bittner

for Thanks last my that. question. just Okay. And

going over Why longer headwind them? what you the going biggest a be for forward As think think term, players share about smaller do going you to to the potential is take from on donate What's to Is to on it share? continue forward? to be competing an driver digital? going tough they time price, to shift are the share compete just inability moving

J. Patrick Doyle

driving we of number stores a for our things, discipline And food national improvements we've The our day but lot for our we've be profitability our customers are franchisees price point strength and run of focus long-term our right, stores into it's that pricing, to it, to there a part of at our of the able level bringing going big around out, on our is a allowing continue that profitability to digital around end and clearly fact think I franchisees' you're that. been is is now be price. day disciplined if frankly recipe a understanding got and of think a not in the the store years to success. not day make in your our nine more

the tools in that So there're things putting as just talking it, store in level on was a but the have franchisees' about store-level profitability customer XXX% can that to that of the DOM allow place played deal to and to a for and Those take be place things and how share. become a us just what do digital business. are going and underestimate going convenience. I are into lot that that big profitability could focus digital for Don't of are we sorts and, our things to continue

Brian Bittner

you. Thank

Operator

of line Your Morgan Stanley. John comes the from from next question Glass

Your open. is line

John Glass

I'd wishes, you like best my congratulations too. We'll to Patrick, miss Thanks much. and here. And add very

J. Patrick Doyle

John. Thanks,

John Glass

to amplify the confidence is – ago why just what your store out you that you that growth? similar call you was it year prior growth you it Can and moderating on international versus for did being versus maybe periods. the as a think you Can end or specific and the occurred, where at market what up of end gives example? year And the comments will it, last

Richard E. Allison

is little across QX cash-on-cash but of store slower than We in globe store remained returns regions, strong. the our the in very, openings, of this very on Rich. level at the out were normal gate John, a each

very X% X% business still is unit we're guidance. look ups a In of in XX-week to growth long-term can get our solid. quite forward, confident So we some health the and period you as downs, the but

John Glass

going one, Thanks example, could right. on can either as Or if more labors voice for check spent so percentage how that in be directionally, ordering this that. store, time, check, of left to phone left sort at Can maybe, could much remind for if or enough or tool. way consistent indicated to there there's powerful is right? you And enough there's then, a be that be what there's in of also All to hours And you upselling, us be dimensionalize Patrick, removed? a in the a just process. maybe got you

J. Patrick Doyle

Yes.

accelerate are about we stores announced think, we're look, that to finding we John, more continues better. this, that so experience, iterate needed out it and but It's pace way we in morning, XX as So order, of data ways because more the you more and this more and still this. the improvement it And gets developing points. would on better in and this, More to I every day. customers it different get of

is, important I our what most with is help it grow And same how it so of thing it's top say biggest, our digital other will the is as would efforts. And all the line.

So savings. is labor some there

Although on XX% mean of our are you our orders if north XX% about figure orders. walk-in digital interestingly, we orders and today I are of

our kind most is going They're way. what But upsold, from in the think of order. phone of to important the walking two ultimately today be on in So, care with the to are on not orders. perspective, calls pizzas going phone ticket. point take your are how takes They of answered. taking the answered stores, people to are there, thing and or on we The the fact out somebody will order into digital. fundamentally, to is that more coming who the the things; looking handled getting so is that's thing. and maybe labor still all are three those old-fashioned big XX% be able a store and getting door be to those can are somebody get just into on slightly minutes But that same making people at kiosks, average But a maybe the customers stores. And around and them think you're then that's the focus phone big all maybe for

saved sales that, is customer So order through it ultimately And orders the I are to activity about able satisfaction. like if store, direct than effects driving it's that better you're an out the orders. important, of think, of taking taking more of minutes in a entirely those kind second get

John Glass

helpful. great. That's Thank you. That's

J. Patrick Doyle

Thanks, John.

Operator

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

Your line is open.

Chris O'Cull

success Domino's also pleasure And, I well. morning, Good a your add me has been wish under leadership. Thanks. it you guys. let follow Patrick, to that

J. Patrick Doyle

Thanks, Chris.

Chris O'Cull

Patrick, to challenges rolled And on phone to follow-up. just a the this I still have digital what orders, your the system-wide? comments about have that to overcome up are then be out need follow

J. Patrick Doyle

going for We've lab intelligence faster setting of more couple the learn working But on only continue faster, you a it. in stores reps kind it's to a But the to is on and much so We've And organization. it. progress quite continuing a iterate it on allows we're more this had make while. while get inside a now. in Look, to there artificial been you can get iterations, for of can to better. you the

of We're And confident number very, you talking is pace think order. of or the with. so area about Alexa pizza any moving to are about are you that though, Siri But about going it, very activity. improvement. there, natural or platforms we very it's out that broad to is think interesting to to for more increase to stores, and covering technology deal there. going small continue them a pace going What's a Amazon the taking And if learning it into and if pretty increase, this get they the is voice of

efficient you very these about going order or do But in call to and two-liter at trying an you is place going if pizzas stores that. a confused. if for all politics be really you to something talking really and off, one pepperoni Coke, large it's be good two you're to So Diet and doing completely they're call start and of

manage is one is thing it's continuing stores be going better But then to we going we're confident right the the last expense of warranted. would that in the the stores And to systems the more to wasn't wouldn't phone all have and this of on pretty the get it it pretty we're be but good. that, and well and better. good step that that's very, be already rolling if So iterations, to very need ROI that into will

Chris O'Cull

delivery What inflation. inflation level it? have is Jeff, talking of freight costs the companies then, supply higher And chain several the And mitigate Okay. been will cost new experiencing commissary help now? for about

Jeffrey D. Lawrence

the basket in U.S. just much food what still pretty seeing the Yeah, that, the really experience the for credit great what to Not to surprise get been of corporate industry. and franchisees offset they've our we're with will anchoring and in that Chris, increase. lines we're stores able so a sales to but the X% there, up stores, on X% to leverage rest to one of really our help inflation, XXXX, the the and

been to costs. that far clear pressured the investing part day, better As but of just on that get capacity, all for we at have, operators area, some and as that some on in have efficiencies. this, we've not opportunities this benefit And we additional P&L. the labor just of supply we accrues We're to get in clear, that And in business. delivery cost to the franchise and their QX of is hopefully be but to system the delivery were heavily chain end the

again, franchisees, the of and at margin as up mentioned, told center on online expect U.S. a I've If new shifts to that and don't basis capacity, in there, And with coming going you I fall. with capacity behind our we all northeast you profits the the I we're share bring in we the remember, half or Canada the before. look business. add the once aligned down wide we so any our We're online. as percentage forecast

Chris O'Cull

guys. Great. Okay. Thanks,

Jeffrey D. Lawrence

you. Thank

Operator

question from Slabaugh from the line next Your Will Inc. of Stephens, comes

Your line open. is

Will Slabaugh

I'll question well. Thanks, Patrick Yeah. a And I carryout. guys. echo had congrats my as on to

delivery and of the growing, it's though, mentioned, guys been And on remains rate you the that, few you at focusing a past percentage peers. faster have quarters. obviously below than So been as carryout, still

real others. estate, do among something to assuming the I'm has So with that

real largely may continue that about in to have played forward anything that now about you remodels the sites the forgetting be else continue potential So can to improving and carryout that estate I'm an opportunity talk looking maybe out?

J. Patrick Doyle

Yeah.

a So real a not which we've get them And our mile way us a drive might own the more further closer willing to of something is best estate locations willing to be to to before, half deliver more pizza. than They to talked improve from are bit customers to away. have customers. about their let it's our is mile or a

are away. let they us fact, further to deliver from In willing

stores, our as to new been delivery little carryout have cannibalization on is, for bit new of there of each are these is willing what again, go is about our doing, we business, a carryout. saying add business, of stores was reflection I a we these while customers when on XXX% incremental which So, far how

at McDonald's true same a so stores, we're that an that's, much see we building There's are in if go, a as of And still customers. add effect pizza greater the going within they've going closer or far hamburger. them for And was through be density some look get stores you of of Starbucks simply we we to restaurant on go industry, only this, And if stores, Domino's. they're cup get understood have the relocations to is that the a We've to help. our that's customers or getting as look stores at from less thing of to some look to to so but than the a more willing you going that, So to focus or coffee just existing you our there of people much that carryout-focused frankly, more of realizing to you're a U.S. these than to gone chains big at lot other going players, today. something

Will Slabaugh

faster little to or in delivery Was question you Makes you quarter there actually particular sense. drive shift that view And do this did this in if quarter I could bit, that that you help kind mentioned a more of flip as than anything organic? grew carryout. around that

J. Patrick Doyle

on extraordinarily all about delivery. our do that is execution And well. It we

find than about remain for there, And that better out experience is are It the we our getting it customers. value that are out the already for It's third-party we delivery with confident them. experience. You superior hotter to anybody research a when will customers' probably pizza it's aggregators. there doing we a better at

place lot a the the food be delivery understand that delivery and our original delivery helping may there's from so delivered Domino's And to people of Pizza. best business is about as aggregator, get that talk grow to

Will Slabaugh

Thank Great. you.

Operator

Holthouse Sachs. next Goldman Your from comes from line of question Karen the

open. line Your is

Karen Holthouse

a question. quarter in Hi. Really unit seen Thank you, things, of first, first time. was two growth the long side you really for than the for on stronger company the taking we've in

about inclement of business think of year? have topic special is comp might sort extrapolate sort sort five then, thus growth weather And XX to been on that fair this unit with any that there careful through an that broad anything And comment helped delivery for delivery openings the pace weeks, you being going back to think quarter and/or sort the of the carryout, to balance the in side on the overall a of of or drive just to as versus quarter? to was a discussion of the pretty Do weather has earnings far. contribution of

J. Patrick Doyle

Yeah. Thanks, Karen.

nights driver our ever point as being geographies, with our one it you us, That averages a that in to just course first, of it We weather material, aren't but it into really that that. the an of there but big a of days business nothing tell it's or as busy our not there, mean on so a effect So, that over gets out just region, know us. because a excuse doesn't here when a never the use couple much, of play or doesn't all or of quarter, the tenths business. in analytics all just we kind into get different really couple material

what going us economics. But For in corporate opening selling corporate but and are we is also strongly our believe corporate stores, will see our stores you some unit occasionally see us buying as to stores, you well.

need we covering corporate I'll a in are general which is of the in. stores, give And a on them that everything we an is Brooklyn, couple more And about system generate already we more that New in and territories in all there. Bronx, already stores can just that a I strong corporately said by opened Queens there. more Our the example. we territory, a you of equally better XXX% our know owned. And We York true return. cover we of added having and and it restaurants cover City couple stores are We

be do out. we some may materially, on ongoing but see some of time-to-time our be that the opportunity see corporate sales geographies going already counts are that from more store grow that and to an with So not some in, little us offset of in may you're geographies further part a build to thing,

Karen Holthouse

you. Thank Great.

Operator

from next Alton Stump question from comes the line Research. of Your Longbow

Your open. line is

Alton K. Stump

Thank on my Patrick. as a pass course run. to well been It's Yes. And you congrats you. morning. I'll of quite Good as

J. Patrick Doyle

Alt. Thanks,

Alton K. Stump

the most there. just But my quarter of I I as great look just kind a same-store here, I course been consistent was have performance could also it sales on the it believe think into asked, XXXX, to strong reason over was quarters look ahead I obviously over last Been is was of obviously XXXX. it be questions there a looking saw a the of more Congrats any the of that. about we quarter. kind rest few year? internationally was of internationally, last a standpoint and than what choppiness U.S. some from

Richard E. Allison

Hey, Alt. This is Rich.

sales all the in same-store You driven was business know of is count seeing, growth. which in we're encouraging is that one international things transaction for us that by of the very or growth the QX order

in some markets count. with say were may about that we transaction value I'm our and that the on growth a all You more back was in in fact concerned ticket as maybe from spoke quarter gotten off to XXXX driven we of coming choppiness little the the few had growth opposed had we to the really that a some recall the issues by first count. had transaction we pleased of

to that to So, back optimism focus solidly renewed same-store growth on in to about gives range. X% that me continue ability value perform sales our X%

Alton K. Stump

helpful. Thank Rich. That's you,

I got. I've think that's all

Operator

line the of America. from Your of next from come Francfort Gregory question Bank

line open. is Your

Gregory R. Francfort

happens, Is the flush the time. in investment term maybe order And comments that was kiosks think wondering how store you a in very that intake your you I'd interesting of of our and on longer more Just where work? interested thought think that just timing someone in labor? out operationally Is business on of of order? it the savings that were be XXX% you how on then potentially could would you I that of happens digital I taking the Is if thinking in. replace just are? could the a then that the can then flushing very sort change sort the cost guys. when over box? little the And to Hey, and sort that that move cost sort

J. Patrick Doyle

success experience I'd pretty a what it We've is to from of looks clear with a of the like into the into bit got order our we in the top customer it's the take pretty how the now, coming terms some But that store, clear fast. on still we satisfaction. to and right then know like, can rollout perspective, only after it customer than Greg, happen not little the any Yeah. is metrics what perform I'm better timing going say first metrics on time, we other to that but place. list the but store. And systems but digital today team of going it is comes working that in performing going certainly looks share is existing have that at

integration and one where restaurants happen our of of that tweet, screen system. a no It that is and reason that can There business the what to into It anything won't more came app, and the the or just and the a line point add So, is on mistakes be order so just straight or comes or sale confident about automatically drops the to not has our from one made. why know our from would system. they or ordering voice, is an delivery just I handoff else. up drops that or laptop, we And are whether into store. model make straight the

great things So work things funnel on the all having ordering the making just we've exactly that on fulfilling foundational funnels that point system, is drops one these pizzas and these so line online all order make able to sale that been get the in, that to the one to doing, into order. of same system people way, of of this

Gregory R. Francfort

for you maybe delivery to to the or stores those fees in those of fees just tailor one orders fee expect it go How versus delivery on And delivery do you plan of what's Hotspots. follow-up on Hotspots? the sort on no possible maybe Is or your traditional the orders? franchisees terms to

J. Patrick Doyle

Yeah. to answer the fee. first That's control is but Well, to see But set think I I that. be identical fees. to fees you're what there pricing. they delivery They guess regular happen, delivery going franchisees their their control delivery going is their obviously would

Gregory R. Francfort

thoughts. the for you Thank Great.

Operator

Tarantino line the Your question of David next Baird. comes from from

open. Your line is

David E. Tarantino

the wanted Hi. franchise unit think level, accelerating in seems of this be digits growth at base congratulations, each Thanks. appetite overall Patrick. even maybe just sort question's the can to to I think U.S. you years? to mid-single ask quarter. sustain investment next in accelerating My you Good do about And It high morning. on the current the among units. few continue about it higher move new just you as And a or And

Richard E. Allison

do time is contracts They profitability seen because the that seeing one get Hi, the really don't it. level. built time. there as to because what unit we're at the in is in that we've David. push the And And This cash-on-cash returns over stronger is numbers Rich. focused on we over stores thing. returns because franchisee of The reason that store driven growth is are strong. U.S. we are that strong really or And by fundamental have get returns growing very franchisees built are

incentive franchisees, decided three approaching terrific them the have for two to the and with return that a to with And You better wallets voted an years make. combine without and that years you result get investment and cash-on-cash that with that that's offer some their our franchisees is incentive. we is incentives a than an

David E. Tarantino

this And, a based Rich, the to reform on cash flow along, of more Are mentality that dynamic? was it unit based sort bill all tax good passed? just in been is is on recipe now at have Or franchisees investment change on what's which you seen the gearing more up do since the level?

Richard E. Allison

is that flow. cash primary the So strong reason, really, David,

after-tax Our store put the But a helped there incentive returns better the for to tax and on above franchisees the in EBITDA averaged franchisees rate, certainly about over little last and more margin, to certainly bit grow. in the lower a U.S. at in $XXX,XXX, therefore, $XXX,XXX that, year. most level

David E. Tarantino

Thank Great. very you much.

Operator

Your comes next of Guggenheim line from question Securities. from the DiFrisco Matthew

is open. Your line

Matthew DiFrisco

always And the operators for a name. you. it's with Thank name and there firm last my the challenge

that lot a to here, you while us question update. been gave are A you an getting digital, it's about the detail of job. good So, talking a potentially XXX%, Patrick, about since

better we an sit? you always you of than XX% you Are give I on where crossed think you've north Can XX%, XX%. now us said as far update as digital?

J. Patrick Doyle

we've give tell to it's in way be business. but that out happen. can't grow, to to a that's fully you figured timeframe now this with but happen, north all No. And continues what Stick of are are is, important what the it of going be with we of part to key doing data But business. we drive an the we XX%, the And I a incredibly can going a I remains when XXX%. going get to digital you on can to doing but it's

Matthew DiFrisco

the you've the in delivery the, acceleration also up or with anything, with and Well, the expanded milestones maybe give guess you've but the I delivery check want growth, also know when I don't correlated historically an seen with digital pickup step digital? us your is in grow. you that to

that's wondered, also demand, share had You've is expansion reacceleration delivery? of a correlated digital winning better sales personalization with driving or driving more and I and so this your of it,

J. Patrick Doyle

digital that it tell what digital But to that delivery. on now. and more be would more being there overall to the emphasis is, up business move carryout it We've Well, putting carryout business just our to thing other is, big and one, of you skew And direction. about number continues more on of used always I is it has. was our more a put very as

earned now anywhere into plays Our being program loyalty that. definitely

grow So has it the overall in helping and past. it it's to continues it our as business helped

Matthew DiFrisco

Excellent. so Thank much. you

Operator

from comes question BTIG. Saleh next Your from Peter

open. is line Your

Peter Saleh

that and that on outstanding career. versus Thank this about the to creative quarter grew your your business. carryout. just ask on was the wanted I said congrats, delivery Great. faster know I carryout, fact than focused carryout really an marketing despite delivery you, you Patrick,

delivery this on any you of governor the is enough growth side the sort the for to finding on there So, delivery drivers are continue or growth side?

J. Patrick Doyle

Globally, we I proud X% guidance X%. be. to lot the Domino's. opportunity the of That in out no, we're five be player Domino's. see that than out Our U.S. XX international, continue in is tonight, think we from somebody to X six to mean, look, be a But we largest if pizza. – are are is add other are pizzas going sold now you of But sold to other to if than going somebody in by are going of where our we

our in the So, so more share bit that of and got outside the growth U.S. and growing for U.S. is little There you've category low bit is today room lots a a is clearly that ahead. a than of

Peter Saleh

had carryout I the being then past discussed in occasion. And you think Great. separate guys a

had still it's feel overlap? you've time like that XX% fairly maybe a little more data occasion and bit look it, to separate Now a more at with a about you

J. Patrick Doyle

that's Yes, about right.

Peter Saleh

very All right. much. you Thank

Operator

from Jeremy Mizuho. comes Your Scott from next question

line open. is Your

Jeremy Scott

areas the of to outside the talk to It very Hi, initially Was a seems targeting. of solution be thanks. Hotspots. more address that issues, a bunch different even you're hoping bit about a intriguing to

question. So had a I multipart

study wondering dollars to talking of just First, if as transactions some early potential would an sales interactions you predominantly incremental put assuming customer or going this imagine work. that idea you're we're I marketing and to about launch? you lift have

huge to customer on change your targeting I view were hard, the and other street, this context targeting this and and innovate where what then carryout towards mix? the the that success campuses is locations? And better down density, a do going? locked way store if and you this delivery of understand in comments really but Second, parks, about on beaches your complicated world you become third, would your see

J. Patrick Doyle

Yeah.

want why So and safely time I'll our back can the to a.m. end big them these of control to set our actually need the all sure to take safe it hotspot sent which is safely to X:XX that thing part most so last for coming deliver the a keep an being stores they're the is of important the alley Yes. that the not at locations. first. able at we make and drivers, up On that in We The delivery make night. that drivers is we're

a excited And how investing We're made. much given Yes, going or that's most things there's we I we've control some got projection it, of a of convenience as around going some it. out overall, get to these that why into for it into the exactly ultimate with providing make not open complete as where of plays exciting up we fact think and to but in. are and that our kind clearly we're to specific deliveries think can deliveries customers. incrementality the we're incremental lat-longs we're lot that around be so that to control to anywhere fundamentally target And about in be things terms plays does of going how spots and

the that So able you any we've been to and ordering be technology. with fact interact talking about our should Anywhere suite of

any Domino's that different to includes going should about. all you we've location you're a pizza and be get able talked where to and things think the it fundamentally also to delivered We want campuses

Jeremy Scott

might Thanks. And batching? order same, Great. how the that locations about may And Would or targeting between be you deliveries. the differences be then operationally, maybe do different you it same in franchisees hotspot targeting just see there be that hotspot? talk the then more work different out may

J. Patrick Doyle

Yeah.

contract. areas part they as have of defined So their delivery

is store, that the address and attributable each same. remains So to one

that and So their set designated territory, if it up, they they're theirs the is who to in it service. hotspot one's have the is

going not that's so change. to And

Jeremy Scott

Thank Great. you.

Operator

line Your Group. next Stephen from Anderson Maxim from question of the comes

open. is line Your

Stephen Anderson

takeout see tested the a that's to something and To the after to the about morning, I Good that guarantee. congratulations in recently. markets has any just you. been wanted want to any orders I the takeout it's if in And, if incremental launched Pat, very seen question you've ask point, increase everyone. test guarantee

J. Patrick Doyle

so think to of you've of pizza the is that around for Well, are seen straight I that they're they sure certainty timing in some out make coming the ways international oven. takeout around put can guarantees. end more people But the get things going there to

to better, carryout at we is, your insurance overall that you that about so be been make the which the carryout way on in how getting look, out U.S., to that in even we've something can are with the of wrong they making the is it, that. it, satisfied experience of all come that predictable, got You've want yeah, with talking the get more we more goes the on sure right home, looking if even and to delivery the experience. the customer there when ways oven pizza we're hottest come But of possible end

Stephen Anderson

Thank Right. you.

J. Patrick Doyle

Thank you, Stephen.

Operator

of the Evercore. McGinley line from comes Matt next Your from question

is Your line open.

Matthew Robert McGinley

Thank you.

items, company-owned the dynamic some had the declined flat years been the you margins you on and but but few inflation pretty have quarter stores, this On pretty strong have margins. had other you a past for comp, strong has comp labor and the

that question margin where you're that of same future the strong at where should differently that where see a So we think is reasonably of you are with have business there comp sort don't we And the deployment? you decline? something is about doing or labor

Jeffrey D. Lawrence

the business. continue Jeff. say flat we Hey, in the you're to quarter. as corporate were They in that in about to those achieve have stores percentage, Really enough a they that up almost able can't they XXX it's Yeah, first exactly grow Matt, portfolio, dollars, as right. were what obviously,

that as that a pressures, there even pressures, the an significant at real business. minimum-wage that to corporate we headwind for portfolio, was great to just result, are other As And their were a you some pretty are that. stores a margin, know, have and thrilled places for way with fought regulatory of we're kind those guys whole percentage

bit labor, they got also of little overcome like food, well, a to bouncing other there. that. in things had things as You've beyond Obviously, around

work the stores test high leadership the XX% good for of those. still of that talent, business. win So, have provide out significant to able their out we us were pretty that in a we all things Make corporate question, a is look sell to those for and way mistake, system, at believe to fact business. that ROI business, they headwinds, develop great betterment it's franchise, we no reasons like some using getting And big but again, being some back your the return, to

Matthew Robert McGinley

Got it.

$XXX previously was XXX looked And guidance like it year, had that you G&A but year, $XXX to the around $XX about I to the if to but ASC guidance On the in million. $X.X and rate it million. the the million only dropped million, be for should run million $XX Q the $XXX by $XXX for million million dropped that, you impact

So revenue terms G&A of something that about Or wrong ticked thinking of net I just up that core rate? recognition there bit a run little the was is a a am change? there in the and else that in

Jeffrey D. Lawrence

No.

you G&A one an Little it. million was, million line takes offset that foremost, and some around so about about item re-class kind locked we important couple things pretty there strong but is the initiatives in would what's But You're there and all $XXX got we're it well we as off accelerate we puts of to with talked and right the performance-based but to there, there, there, we the of was no, now the of over first tell $XXX And most that for of the start. were number that all as businesses were re-class. comfortable bit Obviously, technological the there. a a comp. the in

Matthew Robert McGinley

Thank Okay. you.

Jeffrey D. Lawrence

Thanks, Matt.

Operator

from from comes the line of question Jeffery next Your Barclays. Bernstein

open. Your line is

Jeffrey Bernstein

Patrick, you inside very cross paths Thank restaurant or Great. much. hope outside industry. whether again, our the

J. Patrick Doyle

Thank you, Jeff.

Jeffrey Bernstein

And Life seem be delivery on wouldn't guys a you from front. be didn't holding about if to we up the obviously, well little same talk the that bit extremely aggregators.

are succeeding category an the just is think And seems on sales assume because how from? from that's coming a but call But success we perspective, where a on sales? just and losing or seeing of everyone's claiming really see be it mean don't from other it's delivering these the on I themselves if They're as well. deceiving in they're end. are it, restaurants everyone's perspective should much yet even talking just not having profit do you that cost other might or about is they're and other like every after independents they an you, I that we're it the in-store So feeling it impact share seeing uptick though possible.

J. Patrick Doyle

a it's of think prisoner's I dilemma. honestly, Jeff, bit

sales, prior If it incremental. would category, almost and not if argue than not, in accelerating but a may seeing you to it growth then everybody the it, doing it is some And lose that you total, restaurant now not growing aren't this. it, I is doing you overall is are is restaurant faster was the of category

does it individual don't is, may is in it restaurant not everybody if to then brand, the I adding that where be else do the category. But overall what cost that's For of their to margin they adding is growth it if and that an And question we bit. doing think cost a them it, little the are.

Jeffrey Bernstein

very you Thank again. Congrats Interesting. much.

J. Patrick Doyle

Jeff. Thanks,

Operator

question the from next Sara Bernstein. Your of line comes Senatore from

Your open. is line

Sara Harkavy Senatore

Thank you.

of business, may, couple on I top follow-ups at Just the the a U.S. if line.

more First, the I'm I sold seems driven, But was who's of pivot and, what was if characterize six remains in drove just five it big in value Domino's. what it advertising maybe of struggling. it a you was trying to international, is question your about you or good quarter. And said direction, if just story. particularly to versus could with And I really that And it that not understand typically that somebody that? you wondering quarter if consolidation last me to is comp out competitors both have a big a just know mentioned one you just XQ. so, are then had effective more this quarter, you second pizzas by said I traffic-weighted was similar the

that look because been So, for the the sort consistent what the I competitors mean, I mid-single-digit a I if large just the an of isn't range industry, it's is expect. with guess big it at three, I from you of that sort might average conviction the if will, more

J. Patrick Doyle

things. of Yeah, couple so a

we first more advertising, is was know little test advertising we how in on you we effective was QX bit And the know advertising a team terrific. it know, our affects business. QX. and And our So our everything that than exactly analytics in the

in a one into is equity quarter first that we of the $X.XX. for of of all point to two the about other your two and medium, that, things have that around lot and The us bit it, thing activity kind competitive played of a helped probably tops

years, price we that the point that in matching quarter. a of our of the point built competitors over it own And price of helped that equity have in first altogether that comp We nine our our possible kind is minds and customers. some bit

for So that bit I big as at in played a into helpful the Not in first a way, think bit I was the but well think it margin, a little probably quarter. us.

Sara Harkavy Senatore

you. Thank Okay.

Operator

from Your of line next the question Ivankoe comes JPMorgan. John from

open. is line Your

John William Ivankoe

for one? have And medium, was on you When point. only that negative advertised during two $X.XX not competition top my see those running was television you exactly actually did a a may not the positive two question impact, weeks, seen

J. Patrick Doyle

Yeah.

John William Ivankoe

right. that do copy completely don't anything over-confident, All you they're that the great. even have can't to there but you That's Okay. I you actually number benefit years ago mean, to now of to used evidently mean, used you. benefiting impact. that promotions, competition that only And when I but certainly it And each guess actually not competitors makes from? want is some sendoff an you that about I say I is think to can what that, other's

if about? the think any, that risks, mean, what competitive are I So, I guess you

J. Patrick Doyle

If it, the medium, differs is get run their going good And how to working businesses there, they're to of competitors and from are us. What how in smart businesses. that that two-tops be that and what that offer. do within effective predict of causes big good, they're I happen a know do right a now, largest And going to the the and grow people ability through. to that and us can't the at for they're two on we would people is to even grow that's got that you're we've that we've to need underestimate are first things activity been and fact Look, we'll out, have that the be business. seeing certainly equity specifics to going is running to you are thing our in that going for wake faster, thinking Domino's think kind I going their feel their they're count that that going going are plays morning because about not competitors I for to the see going better. up and see things The lot There and things $X.XX of only figure to to about the tell nine do past, offer, thing that's years. I to going their we

cycling than And if old in was equity it real in everybody built so it. different is different in a circumstance when back offers everybody the days, out you've and doing and specific different one It's offer. of

John William Ivankoe

return the interest I'm debt Okay. balance And future. rates could your put your an sheet sure even the final capital you obviously larger for given the even Thank done on debt and question then the you. have and on securities, balance more sheet, demand in

the considering attractive still presumably So into did, what you put prices? at that have recap could was went on you that that more the decision

Jeffrey D. Lawrence

prepared no our industry, just the point lending (XX:XX) out, a for the a that again got Jeff. We went reception performed better remarks, story. as mentioned to credit our QSR and now I and we've Yeah. We XX-year one's community out like All great this in John, for period. from it's in been leverage over the and now doing generation. would higher I

back we've and I good particular us the a know This our certainly. didn't that in summer, soon, having think So think marketplace deal last opportunity, a shareholders we'd done benefit this fixed-rate for just but accrues I originally to off really which we capital structure cash a optimize that the just bunch throw additional, to requires is of here longer-term, and got continue debt. problem, flow organic we be

XX-month The if market you was QX so X.X at a already. closer QX – the we're EBITDA, to last up trailing it why turns. very problem use was was that's And better still good. bunch got QX got X We us than so year, to

a so little sizes trying regimented more to we're often. more deal smaller And around with bit again, this get

weighted we the the the debt to weighted continue that shareholders. organic lower to that more average rates capital you'll lights, really to accrue cost properly leveraged all extent the us to of average staying long-term And future, and to I can life we create out And see the rate into green fixed committed lengthening capital. structure, high-quality think value capital so see, our all will adding at

John William Ivankoe

Thank you.

Jeffrey D. Lawrence

Thanks, John.

Operator

line from of question from the final Your comes Deutsche Levy Bank. Brett

open. is line Your

Brett Levy

the all Good morning. Thank you. And Patrick, best.

J. Patrick Doyle

Brett. Thanks,

Brett Levy

also is a fortressing, just percentage just an kind If we could also in more expectation? how smaller the from to footprints markets? should growth does some but it profile a possibly you margin penetrated reasonable timing differ? or what be more does about about and the we of go deeply talk bit these in penetration the of you. allow a of little thinking impact, how it And not Thank And with

J. Patrick Doyle

Yeah.

get So meeting to we over Brett, we've January the stores so. about the that got U.S. at X,XXX the our or course next fact in think we the we talked that decade can of

that can stores, the delivery, your to we customers. of how So giving you you sense build pizzas you're as gives efficiency also you your more do, hotter but your we think carryout you a increase so business, of much better, grow

because economics the to be is most it our to day, growth why And franchisees ultimately overall. those for our the of And to the makes that, real so there's reason doing we're of it. going building way and think we're important we and drive it business. is what's doing more economics sense about be franchisees has at the long-term think opportunity stores the are the on for around end that, a But it's to part the it biggest, improving

Operator

this further over no presenters. call turn questions. the to the At are There I back time,

J. Patrick Doyle

Thank July XX. to and our right. second listen, thanks, All the discussing And team forward everybody, you. quarter looks results XXXX on Thursday,

Operator

concludes today's call. conference This

You may now disconnect.