DPZ Dominos Pizza

Timothy McIntyre EVP, Communications, IR & Legislative Affairs
Rich Allison President & CEO
Jeff Lawrence EVP & CFO
Peter Saleh BTIG
Karen Holthouse Goldman Sachs
Matthew DiFrisco Guggenheim Securities
David Tarantino Robert W. Baird
Sara Senatore Bernstein
John Glass Morgan Stanley
Gregory Francfort Bank of America Merrill Lynch
Chris O'Cull Stifel
John Ivankoe JPMorgan
Jeremy Scott Mizuho
Dennis Geiger UBS
Jeffrey Bernstein Barclays
Jon Tower Wells Fargo
Andrew Charles Cowen & Company
Alton Stump Longbow Research
Call transcript
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Good day, ladies and gentlemen, and welcome to the Domino's Pizza Inc. Fourth Quarter Year End 2018 Earnings Webcast. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will be given at that time. [Operator Instructions] As a reminder today's program is being recorded. to Communications host IR like Tim today's I'd EVP, McIntyre, & now introduce for your program And Legislative Affairs. sir. ahead, go Please

Timothy McIntyre

the of Thank our reminder members and from results all Officer, call we the that call, everyone. ask call kindly hello want for give listen-only Chief XXXX. and to you, Financial joining friendly I be will results because investor to Officer, Jonathan, A Today's feature have is stick to Rich call us. you a chance this and all to media commentary to full Thanks year in question to This will Executive our so primarily Jeff of others for the analysts, audience, on Lawrence. The XX participate. for one we fourth of Chief quarter asked or mode. you highlight and our so Allison;

each calls statement I the provide you the will find are and of made, the for do the In opportunity morning's this in any can statements XX-K. X-K that harbor safe today. We event to later in-depth forward-looking with one-on-one you refer you release, more the

refer of And may to Lawrence. to In addition, over CFO, like call measures to that, and be reconciliations Jeff to X-K please I'd disclosures non-GAAP used find with on the call. that financial today's turn the

Jeff Lawrence

Tim, morning Thank everyone. good and you,

quarter fiscal and We are year pleased our to full report fourth the for XXXX. results

shareholders. results posted quarters the delivered of During for strong we the to three first quarter, during year the the continued on our we we build and positive results

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

increase at XXX pace our to we in stores a continue opened healthy QX. count also We net new as store

up When an a look With from effective financial negative sales sales XX.X% primarily grew at QX. of let's is excluding number same-store of average a primarily currency, the were during lapping Global take results by for Same-store year foreign was growth and of increases of X.X% our as Breaking Our pressured up order retail U.S. retail prior ticket to the were operational quarter. quarter in stores This continue the X.X%. sales X.X% X.X% year prior a driven quarter. growth increase X.X%. and stores And closer strong grew year addition was that, which counts increase opened the dollar. for in sales lower to for Both business sales increase impact the tax while increase over experience. increases rate. same-store franchise resulted global X.X% retail This international prior stronger Company-owned of sales was grew the to U.S. our some our grew overall division by rolling results consumers brand positively $X.XX, down X.X%. driven diluted EPS comp, by X.X%. our a respond higher a the in the by global

program Pie traffic the once loyalty to again meaningfully gains. of our Piece contributed Our

driven was entirely by quarter Our the order international comp for growth.

all quarter, the positive. During geographic of were regions our

calendar compared that estimate negatively to eve. Year's international by comps both as this our negatively and include not were were the X.X shift. when did comps New year approximately Our XXXX QX We by point impacted U.S. our prior impacted

growth. our split the our strategy expect X shift. point, point store U.S. calendar by our discussed We and Day, negatively impacted be comp to in XXXX to make by to Investor due investment we toward fortressing XXXX willing at and Separately QX as are a X.X were to positively impacted long-term

store also split. was by comp international Our negatively impacted

and pleased are two fourth XXX U.S. we quarter, consisting XXX in the stores unit front, report openings of opened count that we the store On to closures. net

stores, U.S. the For have the net full since net most opened store openings had we U.S. year, XXXX. we XXX

are We The XX stores stores quarter. net added division, during to were net new new international pleased announce the and our store XXX closures. openings XXX that comprised also very of XXX

XXX On opened we franchisees XXX in a strength and year, full X-wall our new full basis net the and fourth stores demonstrating we enjoy division. our X,XXX new Company international stores opened total stores net globally. the attractive XXXX, in economics, net year and for the brand the For quarter new broad

prior to year. for quarter were million from XX% up the revenues fourth total Turning revenues, $XXX or the

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

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

$XX.X income have in reported a increase our note, on not did from our it primarily consolidated to quarter, fourth financial are are this important purposes. an in that and our million did for revenues impact in Domino's in brand to can not used is these It only $XXX support amounts they the used revenue. remaining included million the statements general net corporate restricted Although resulted the funds increase be in to operating are or be although following. The available result

by quarter, and prior as as FX retail changes higher primarily sales from revenues resulting royalty higher sales, from to certain driven higher of supply versus strengthening resulted prior the the same-store impact year sales second increased royalties at year and from against our due the well volumes, fees strong our growth franchise international higher currency dollar $X.X million US in store US food retail higher foreign impacted due by resulted and stores. in negatively revenues International in royalty negative exchange First, stores to chain revenues count revenues; currencies. Company-owned quarter the were down rate.

royalty fiscal foreign full by impacted year, $X.X revenues currency negatively million. the For

$XX.X food by labor our of US the Company-owned quarter negatively quarter. a of from P&L for to operating to negatively and the percentage revenues higher down and consolidated labor Supply quarter. on the was margin operating compared delivery recognition impacted prior cost Moving savings, year-over-year costs. up on increased margin, guidance chain G&A accounting mentioned from the to continued well and prior in both previously. in and was the the investments as This franchise by supply store prior teams. as in new year our primarily quarter, our from and I XX.X% positively entirely million XX.X% was our resulted international was as operating advertising pressured by margin investments marketing driven revenues year as increase to expenses increased year margin but by procurement year-over-year chain, technological impacted compared as initiatives was

are our of million franchise the operating most of net period. in our items A a recent XXXX We in G&A advertising reduced million two fourth the by a largely QX expense in for the stores franchisees that rate gain in advertising from of adoption we Interest advertising higher in the offsetting offset with a expense to the as revenue revenues certain in $XXX.X the average beginning increased which resulting US recognition driven in to quarter, reduction debt G&A in quarter, borrowing on out also guidance primarily fourth recapitalizations $X G&A QX had slightly weighted Company-owned reminder, expenses pretax sale of into million X.X%. XXXX, of an related US franchise that costs. costs fiscal were $X.X quarter. increased And amount costs. and advertising showing from our franchise in million and XXXX equal of US $X.X the reclassification

reported on year. was statutory the tax XX% was due lower the rate from of effective the for quarter, rate This down the effective The from tax reported significantly tax primarily equity Our legislation of XX% credits benefit XXXX. points to federal impact end tax at tax compensation. rate X.X and percentage reform prior included from resulting based federal enacted

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

in quarter was fourth versus $X.XX $X.XX year. EPS prior Our the diluted

down. break Here is how that $X.XX increase

$X.XX, primarily in us a $X.XX. us net net result gain XXXX, Our positive $X.XX. lower equity-based of a us balance, $X.XX tax sales primarily a impact impacted $X.XX. and impacted expense by QX year-over-year impacted Higher rate effective higher benefit Lower by related debt as tax negatively by lower tax compensation. resulting share The on reform, diluted on store from from $X.XX by repurchases counts, recorded us negatively positively to a negative share impact including interest benefited

Foreign currency importantly, And by most our $X.XX. impacted by us $X.XX. lastly, royalty negatively benefited improved revenues operating results

use to cash. turn now of our Let's

First importantly, $XXX capital we in and most nearly expenditures invested million for year. full the

our and starting and continue supply including Center in one to on We rapid invest in centers, to supply two opening Carolina in QX one our in with Texas. chain New additional up our growth, South work chain Jersey keep

We to technology invest our capabilities. also in continue

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

$XXX million shares X.X purchase year, the million we an of approximately For nearly share. average price at repurchased full for $XXX a

returned dividend also shareholders $XX we to Subsequent payments quarterly to XX% in quarterly dividend the per $X on February of required and quarter, Directors made principal approximately XXth, on fourth to million million our form debt. our our long-term of year-end Board increased the our of During two $X.XX share.

for to continue X% the as XXXX. to US compared like deploy Investor the food the excess system that were currently to to to most compared shareholders. impact effective at way XXXX remind have We estimate well items million January. of foreign the annual will level. revenues XXXX royalty stores efficient for structure to we to $XX negative will in in capital be that of shared best Day cash our as evaluate project always, As million currency within our X% the XXXX We'd as outlook $X and business, a benefit that could on you We our up our as the basket

to to capabilities to We capacity as $XXX be invest million expect our in improve and growth technological chain million, $XXX range and investments and innovation. the build we in of continue CapEx supply

G&A to in the our a can with our standard to XXXX. result as in range income quarter of accounting not this our expense Separately, keep impact and do the Overall, performance-based XXXX, significant on material new full but quarter G&A it year. is for $XXX that other expect will compensation variable for please and and adoption the in the to up be our costs. a $XXX pleased are or mind growth performance of a The as very as million balance versus and down, solid affect expected will we that million we on results this We expense vary expense continued our lease have of in plan, momentum reminder, our and our standard be statement. adopting consistent first sheet,

brand We turn over it on and to joining will great franchisees relentlessly to our the you driving and and Thank customers, Rich. our providing remain I'll our for forward shareholders. the today, focused value call

Rich Allison

outstanding another and for was a year capped good Thanks, fourth Jeff pleased morning one what with quarter, I'm everyone, Domino's. terrific that

long-term concepts am metrics with as of up the to thing, elements. and Our results globe be make pizza outpace extremely due across was my execute to commentary it most becoming proud. the our found helpful, me designed time brief performance going mostly fact I the industry's We these recently certainly continue you one the a months, to detail strategy thoughts around we to Areas one. our held continue going goal Day, and what achieve keep substance to franchisees opportunity help us industry focused around Annual discussed we Today forward, spent. tremendous our that as frame the today, to great this we I rather I'm CEO that dominant brand. in well to to on our and plan number and strategy around filled on of and Investor our matters. which my six first The centered my quarterly hope updates communicate,

matters. sales matters, revisit So we what let's again Retail once delivered. and growth

across and retail global Our strong balance, reflected sales our a international businesses. growth US

and both sales. QX, reflected in same-store growth For a growth of businesses blend healthy driven unit our traffic

XXst The XXXX, Domino's driven first in our and comprised fundamentals quarter year growth the net US retail our execution. franchisees US our in of And growth business, QX by and comp new at focus, healthy sales three and of who and outlook same-store teams of our to quarter consecutive sales US marked performance five lead so double-digit continually fourth order driven above proud very strong capped a units. very system. was top I'm continue positive line X.X% Looking count range. XXX and to

growth. quarter net of versus growth see Turning quarter a acceleration for whole were sales retail and a particularly from previous double-digit all now Same for delivered expect, we the the sales significant performance to our quarters. all Fourth openings strong represented and certainly result fourth to pleased have year. International, unit come over store but can I'm what coming improve order comp to we strong

milestones. two we During the had quarter, important

this of unit the store provided time. First, growth of our the business a to lengthy testament over to has XX,XXX opened the period engine, United States, a we outside segment

reliable and the global consecutive XX to Value deliver value straight to straight was We QSR. In franchisees quarters, same-store the such milestone. fashion. that matters, player matters to significant master a To be the us Continuing impressive quarter in our value. is positive in remain mind. we our fourth blows for discussion let's in our our continues strategy. of brand addition, think and growth. sustained and sales an officially part operators business for category our having grown a sales international helping achieve within have quarter our model testament of turn what years, honestly only XXXth meaningful to still I best and a credit XXX my the international of And

for decade, our and resonate and XXX our the to to a beyond offers XXX customer program our deliver equation. additional point, overall the loyalty for Technology, the we leadership delivery matter. price in continually US As benefit search nearly and customers. value have just But continue with carryout we

call The Piece of send points month. help loyalty its our AI can't in we fourth points photos is but like program using and note program. Generate we always how kind. of exciting case Pie grow program. Pie's our brand do on introduced of call trying launched of to a earn other and technology something for no how loyalty It we things is example identifier I participation in Pie we loyalty more a quarter, Pizza, to differently, about our earlier one allows this ahead stay and platform Although, bit make the in any news. customers the interface this the awareness this and We engagement

frequency industry $XXX,XXX category XXXX million store we anticipate US profitability Day and profitability I platform Investor at excited better range a payback. everything do average three-year certainly and Very global performance with We Domino's. at about cash-on-cash As of of to very of am we in at unique to over returns in the for provide over and per updated of driver Franchisee than users be sales this this this been is EBITDA center and economics at you meaningful with has $XXX,XXX XX program. active Franchisee unit a launch our will franchise the matter. the store this few figure. time,

economics relationship openings for and potential priority on level our because providing you certainly growth a continue for closures. and will is We it The their information metrics and enterprise will success. on heavily store any store level be between me for And reliant business profitability of CEO. our as most franchisees' is a notably certain as of demonstrate the system be unit than and economics, top Few better growth brand. health should us shareholders priority restaurant and

for and discuss stores top thrilled years health year our we combined our long-term of nine full a the I'm closed closures nine of is of of in system of is confidence potential. XXX, XX,XXX belief indicator base with the a me say a us heard only a international, several that of a A closures gives nearly franchise the have testament when that global and US You to component economics. now, to how great Domino's of strong in number story global true deal unit stores XXXX,

results. on focusing better with a to In it's that By beginning success. dominant Domino's. quarter year to the And accomplish our what Our been full time extremely matters, has closing, of franchisee for we positioned our am and and are four-wall fourth growth-minded I'm to another very why some our win just proven never confident the industry and XXXX pleased continue economics XXXX pace questions. be reason there is and well a we're only at happy that, I with to the Number take long-game of goal X. pursuit long-term


question the Our from BTIG. from first line Peter Instructions] comes of [Operator Saleh

Your question please.

Peter Saleh

the wanted internationally be check you helpful. What's Hey, just check to growth on the driven the guys. order are real going would I primarily Great, or by on, has your the that think traffic of to drive discount said thanks. quick just dynamic commentary seeing international, franchisees comp some I any growth. on about ask you been the

Rich Allison

Pete Sure. it's Rich.

driving and that a around On the also trying but are across on in to time. XXX lot count franchisees to US is a And with over check what we brand the on to driving master price focused talk are about growth taking consistently the globe order approach it do it minded markets well. is really as focused We we're increases as value. XXX, stay transactions, international our opposed as the taking our in

make So way. what that really XXXX growth, right saw we're the was driving focus to you that continued in sure

Peter Saleh

Great. in And little X% below or line with bit then quarter much what we or anticipating. expectations? Did the delivery in fourth behavior was consumer times just shift growth any the deterioration pretty any were domestically, prior in versus see your the in this you comp still was a

Rich Allison

with really the quarter. We're the happy fourth growth in comp in the US

the like comp exactly traffic As see it's really dimensions. business a with earlier, is across stated healthy what driven we all which to

Timothy McIntyre

Tim. Hi call, we stick to really just please. you everybody reiterate, I'd this to would like one to this like question is on


Yes. ladies the may you to in please Once back again, gentlemen, limit and get as allows. time queue question, yourself one

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

question Your please.

Karen Holthouse

as that programs of is to program, the transaction. can program. So, an you confidence of expanded and you one we in outside just just apparent is of that you pathway, half-life about jump promotion and something the you points sort it put performance a loyalty Should digital was reasons, context loyalty needed for with talked come been new previously a of Pie's expanded the that start, existing sort indication, overall of more in become in like starting natural

Rich Allison

with a million has to bring a to more it. It with involved remind for program active rewards passed our program I'll since driver now. was actively we points to driving drive interesting loyalty the the everything continue ways the loyalty to and hit does a about half-life, until consumers The gosh, enhancements be about done And mind the we've hours, are little XX wait making and and as of enhancement and our our back XXXX. Our the to transactions and to was users. is and it program January, over in in for comps time us, transactions, program we on now, program Investor all Karen, not mark for to launched towards we we sign-on Sure. that customer program that and get folks at that the structured bring to loyalty Day frequency our approach mentioned three news Pie that made structure Piece of the have years base. in program And but sure with the significant continued more we when its ago terrific call over of Pie's


Thank you.

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

please. question Your

Matthew DiFrisco

in? shift calendar or the later. in some made. a factor comp higher Easter pricing all into states. comment, we you. the anything to our else think factor at also the I wages occurring shift comp just play comes in Lent, Is about a that a to so you think given and pricing Does about Lent of consider then another of XQ, to lot went that respect later, comp the quarterly up domestically? timing Is should that assumption things And little Thank the calendar certain With in of that there sort the with

Jeffrey Lawrence

obviously now calendar did report for since it's We'll us Jeff. the this get I enter Yeah, you can't by right QX hit point, We'll QX it we're that. Matt, in about on QX. and in of what most can tell But we that primarily is, back, X.X shift.

that'll or about be rounding worried the really we kind seasonality here any of executing putting want that versus XXXX, that far in numbers and quarter As we're quarter of type as stuff. it, start not up


Thank you.

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

Your please. question

David Tarantino

morning. similar quite and you what was comp Hi, domestic good the you pretty know But was add the is My calendar when issue, bit a comp to question the comparison QX QX. on back lower. trends, had in I the

maybe way I does as look my target it your look does when at decelerated like you on two-year that X So your but decelerate the basis, business you the your it? at Did question to X change -- not you business how or is a change XXXX? the guess look about thinking thinking at comp and enter does that stack

Rich Allison

Rich. XXXX global it's the versus David, is I retail not and at in look at to The business XXXX, US did fiscal up XXXX fiscal business, up Hi XXXX. looking way from year we we We decelerate fiscal in our it look the were XX.X% were XXXX. at sales, that full XXXX XX.X%

a in you were we XX.X% If took quarter, up look up we at were and the XXXX, in XXXX. X.X% fourth

the of very And So for quarter business, it One, reasons. was And is dose were within key a take we at. look in count, couple we about fourth nicely really driven transaction a growth really, our that is growth. the feel range the the secondly, long-term pleased which very with healthy -- growth by retail expectations. we very a order of that, of comp good metric across sales our the


Thank you.

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

Your question please.

Sara Senatore

Hi. Thanks.

has in any and of that then, about what one either to US, and of be the the whether you overall? two stores and for of about a the on gap anything Just system, sort can greater it's kind for portend small system kind company that aggregators. of year basis comps know of say of sort stores widening that your the I appears by more splits part affected company And spread, company-operated bear or/are very a

Rich Allison

type in company-owned the -- you the as concentrated markets. those eight know, in those more are markets urban and primarily in stores are, Yes, Sara, you're

realignments have to all is are territories. folks will those store more there that business And that from we our So, focused. little impact because openings certainly of where in the certainly, be an extent impact, you the going splits more the that's aggregator see to corporate areas of a are

don't So toward and in see the concerns about business, urban are profitability the that little good -- quarter We feel growth. our we we corporate the from characteristics the but setting. any skewed growth store don't in more very


you. Thank

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

question please. Your

John Glass

Hi, thanks, good morning.

You've be about comps in and if impact you the at is US. impact anticipated impact years? it trend split couple impact. in splits talked the business is -- the know internationally? that I or stable -- or we last over it report the international in that of Decreasing maybe the What the you your been would overtime without as split time split that fourth the of over increasing look in quarter

Rich Allison

happen You know, point Day, the country state by international we have shared on in, a what growth you be side the the half similar to in you of and vary really particular the point with business. a going it's at back that upon, to to, We the country. to we depending don't it's share country, because side, John, really US of Investor going with to number curve on that

And happy markets little growth more X% quite this takes we a the a of brand some that to drive level you're talked profitability fill, as account, fact necessary to been business, impact bit investment will franchise. if X%, we're that see overall are as going headwind as in overall the it outlook our splits. that to in quite same-store well primarily is where to some an markets space sales left more have back a a year there other may lot franchisees our to at take we three today, lot see and we in less where white because And due more to the as make, come impact. But to Investor for of into and And impact our -- growth of franchisee about five to more the make. Day, it's got to on of the we've sales an a retail of we our happy the you penetrated


Thank you.

line Our next Lynch. from question of the comes Francfort of Merrill from America Bank Gregory

Your question please.

Gregory Francfort

Hey, guys.

tell thought I how were the and comps, about little your just I was I'm on and then curious any wanted many ask international of, had below they came to conversions in quarter? expectations the and So me softer could just you just, is And that regionality I one, to, might maybe what I'm, than expecting. And if the have because -- there? there if attributed kind count in you been

Jeff Lawrence

going underlying those to look and market few But were said, a Hi, we markets, the share certainly Greg. a have conversion been the of that. health positions, markets key we unit economics that happening our be and specifically when you we in in number that, markets strong softer to region hours I quarter place certainly of Pacific fourth even in the in around the see fourth in will Pizza take have to In the With That we the and is key longer-term around various always downs -- few at that some the a could specifically. markets ups with We're international primarily the quarter transparent with fourth world. the Europe going have of because we with great quarter continued in business. conversion look fourth we're quarter. comp, at little unit fully I'm trends in are number in to better we the the more been DPE there pleased progress on higher. report the their in quite weakness refer the was a the that with with and growth release pleased in Hallo probably is was teams comp, the got our were has we there, growth not -- still when to sales would converted the that the the growth, -- comp, the from that units Germany we've we've making And on very the details and bit place. trajectory about retail XX It back and love of of bit get seeing and management just product where strong respect than in a the over the and of you ago step


you. Thank

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

please. question Your

Unidentified Analyst

thanks questions. my just This XQ. more morning. a could bit for for in Will hoping all, the Hey you taking was [indiscernible] is little actually I comp this out for

in if more that? seeing the check prepared we little was of a included growth I'm ticket growth. than said You accustomed your same-store some bit curious the are is what sales just to driver and growth remarks, that Thanks.

Jeff Lawrence

business, the addition get US traffic. did that ticket. would it's I was of for Yes, a sales call majority what Jeff. of growth, the the did Real quarter six, comp smart to good amount retail in a decent We fourth five, in the

analytics traffic it I'd you. franchisees and it ticket precision our little So, tell using is good there. based aren't really call primarily to we have that of with can They're where bit I it's grow across of doing capabilities the what -- would what doing really was using more you, smart what figure nearly with raised I'll using but places prices ticket, the kind tell in out franchisees balance a again a that. the our the But, analytics, board, a working where it we wasn't sprinkled


you. Thank

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

Your please. question

Chris O'Cull

the the around the mitigate seeing, of we you're pressure Yeah, corporate thanks. are cost I margin well. there any of the guess the had seeing stores stores? follow-up are pressures regarding to to But a labor some applies opportunities especially kind at and to I stores that slow as this franchise

Jeff Lawrence

this Jeff. is Yes,

were certainly increase demand we items, US and labor many be situation the at economics efficiencies, of you labor Within and the rates it rates is and the the everybody is When around year, one increases, really pretty rate some store to One hot pressured that now, look -- course market in that the labor the business, the enough teams know, operator overcome in up. it the government-mandated got rate, significantly and and world, which generating for nice but fact can the rate that economy did we're multiple margins them. that challenging wasn't follow, now really but on white environment labor on the as the great the store the just a two-forms. is they in job right has line countries corporate you of also go sometimes labor US, that of job our of in, in labor of a

as don't or continue that. are think But technology opportunity. practices that. really stores, to really inside consumer there, the of our learn in it, to franchisees sharing of always chance, we taking So technology the up, a continue will I look increase opportunity facing, from go their we yes, that can it all margin, scheduling better investing to the kind just the dollar we things labor that. difficult And opportunities a it but that, in with best have great us for efficiencies. traffic the done of make is job really, to forward, the to give drive of need goes the how we're extent but to there to corporate think we're for chase driving to environment us profit labor, like that as more who store, volume, a decisions why use And counter own But our this at fresh care we with can labor, point big obviously sale, those driving we in got opinion way an to I do out work there. continue But, in certainly an behind regard, for

Rich Allison

describing to thing over A the sales to we just as of in expensive we've which just is radius B. for are terms it do And the our delivery have time a look point most labor, to we our changer to take to of that game forward in from and pizza going to we point areas, fortress makes our from about driving of on incremental is time, some near-term reducing reduce just Chris, come talked delivery markets. addition efforts also cost sense. to The of to in looking past, the these household, couple per The was things to add Jeff real effort. a what over

the costs. the scheduling a terms Of trying for efficient. delivery. as the flow to smarter store go about alongside this that To country, time, the about we're driver And the is lower around, of in and described back the as to to the drive to that costs delivery product the distance, from coming course, we to our more the being lot think that of the things the that years customer Jeff shorter see the the reducing the make do we how around rising and cities specific store using out of key out labor the technology over store, shorter customer the wages getting in from lever


you. Thank

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

question Your please.

John Ivankoe

or very you in level quarter drivers. satisfaction store might and availability you and of the Obviously heard reducing to would your know you popping want Thank guys but know is otherwise employees I'm want your terms before delivery that they in you in-store that with markets, if about are way at I've comments execution currently I constraining various up now optimal think stands, expressed their heard have wondering be? the are what be staffed have that much. you that using optimal be the delivery US, the I in comps fourth you from execution of but comps issues

Rich Allison

we're execution satisfied. on John, never

getting we've and out we and new, been We never to believe and as competition, there. we're competition, the the as fast old but ever satisfied better in are than we're customer

we're is drivers to that. labor part said, certainly it something takes the in need in on it the And availability market working and our So times. and as the customers of that And market a us that's pizza better, to a plays every time with to Jeff and of driver yes, short that each is, right very both around answer The tight now. day. those we labor variability average get also terms get

our today, So for to drivers franchisees years best have they many those work and have sure than sure we've make ago. make place they to when is five got Domino's Pizza more got had that choices to the

thing their well, does us, wages drives per when places driver around terms to the for most That in many that country what compensation. the deliveries our these drivers get. the important look of hour And So are store we mean where minutes, fortress to zones, making to nine at and minutes in down out from cut or minutes built find is turnover those down where networks six in and more places we those less. delivery in, five we have how drivers that the satisfaction is our money franchisees

we to work And our a with franchisees short-term a a the in years. our great growth really now, not than wanted long-term of stores. for place but US the store today started-off focused many our to of opportunities in we create developing it's are and is on things to of the the XX% to tomorrow, also play, So faster delivering phones the pizzas or and a are much play, drivers be of that is right franchisees now it, John, very it's started-off become pace in the in new US, that we one happening have answering resurgence franchisees in we plus terrific at

for franchise those proposition so we've opportunity the only around value have vision for owner got be Domino's to them. that attracting at terrific We near term longer-term a the not drivers, for we're think the also And but wages, Pizza. potentially a


you. Thank

Jeremy the Scott Our comes of from question Mizuho. from next line

please. Your question

Jeremy Scott

Thank you.

teams up. as you international separately, ramp G&A mean broaden that exactly that going? become come And some in about about that is And have start wanted look you and we you in investment markets Did your to should step of Just a secondly, did dispersed ask out as into then be to that investments start forward And up your development growth. we your in bit then in about does your talked where as beyond more a in store international about to of that, first mix, XXXX geographical newer expected. your the G&A? to thinking

Rich Allison

the pleased on the growth with very store Jeremy fourth quarter, we international the store growth. were So,

we talked start our to about that, earlier slower was And very pleasantly, pick expectation the in a calls the to of part of of course the we fact it the that happened. year, As in see got-off over wanted store the on that at and we up were year. our time to growth in some pleased than year see would earlier

that. X% number around say that with very remain our going three a payback the even out I forward, for because the outlook business look international we confident to of in the our very are business growth. years of still X% And on of in much economics in with solid our fundamentals As than a markets, I'd four-wall store average faster

all gives in it an we markets seeing happened XXXX, terrific things the years the Brazil We of And had confidence, foundation up in market, building place. Russia, acceleration India, in the we're brick very really got forward. that China, as particular. store in the put One also us that in going previous XXXX in And we growth. optimistic master there is great the in ownership new franchisee

end XXXX. five-year to positive feel our XX,XXX So three by of good and about the I very total the about feel stores outlook of globally aspirational goal

that, is of that's support and take our something data business some capabilities our on day analytics Operating driven franchisees over think we've hard of that make the areas last things markets. US And you some And about centers to at behind building was our Weiner around our leadership a several the working one we Officer, capabilities. the really business help second the quarters excellence talked available and have them we're international a business and to our that thought in Domino's our Russell here decision investing our post the that little continue snack more every Your that in of we've question, G&A. there bit there of international Chief been change is is one to one our the second I grow. and And around adhere to is

and we're be to helped so to take of so come of port the out to years that data markets. US that making have going looking to over us analytics, to international of And in the some be some decision successful more driven, the our


you. Thank

question line question Dennis of UBS, Our from the your from comes Geiger please. next

Dennis Geiger

quarters. and specifically the Thanks for you in to if perhaps share you just if there areas took the last wondering the share And specifically you relative any couple then the about from the in greater brands. amount you're focus Wanted market ask whether the the over saw question. where given looking any Independence larger to larger on at gains shift quarter increased the carryout Thanks. saw of incremental the taking brands, side

Rich Allison

at of driven our look to things is of that business market one continue our answer growth is, four gain back at than US overall XXX% at both -- if transaction share healthy of both the US pizza grew and back very a Investor and in the even you growth by those the Sure. rate we across healthy across is, multiple our clip in that's international a very Domino's. being category The in short more market Day businesses, the we of business the in businesses and we last January shared in the that years,

of You overall pull of their you Domino's when Domino's out the the transaction all market, see out of add the, you pull you would declines up rest that the if -- players.

nature business. in -- fragmented growth look the one carryout larger the players we we and Across even continue of about that the to it, whether we now, Now of we from different take carryout take a places number number in of of share medium-sized the player the at market agnostic still smaller as we're fairly share When comes and a our elements significant shift some potential, share business, both our different have from players the from overall frankly, grow the in category. the given and delivery time. over share or


Thank you.

Jeffrey next from comes line from of question Our the Bernstein Barclays.

Your question please.

Jeffrey Bernstein

Great. Thank you.

First, it's a to want television just on regular your basis. Rich, to on you compliment nice ads, you see more

Rich Allison

Jeff. Thanks,

Jeffrey Bernstein

comp commented make countries. in different slightly broad had many talking are just seems a make come that, you couple it's it Does fact front it long-term multiple of so years. wondering, international the the the next range, you many in and markets lowest Separately, all when little below aggressive, did but for the a the X% especially X% the it's to markets, like you're look when that, to guidance I positive. reality, the weaker that in years about comments, tough on just Sure. brush But, recognize

of able correct, just all So seem a your headwind markets. be is slow a to of a and you're all that big going there much seems across more sudden doesn't to like steady it it's pretty like

So total why the think growth you I'm why you're guidance, in retail we since guess know lower not how that or that such sales long-term you just perhaps confident a I re-acceleration or on? about focus that wondering all

Jeff Lawrence

Jeff, continue Yes, we a really particularly We mentioned international master doesn't -- master opportunities our wildly to the comp down sales the call markets to fourth you weren’t potential, our that markets, it it that the to on earlier franchisees in see perform business, altogether where that In franchisees thrilled cases, executing as but In largest we and is we international drive some level know, number. in our we needed factors. I the quarter the same-store we that by short-term short-term weren't want the maybe some look ability over regions with is diminish X.X% ability quarter X% confidence outlook that some markets, to. drive we continue gets and the in number, fourth growth when positive, really while across some some markets then had the had that at not the and the because, break We were the drive to pressured international, cases, some better. our to overall the had positive, negative. all And at range. longer-range we to we it's were X% macroeconomic certainly were a blend. take as be, our business And

any make for we don't it, opportunity forward. excuses we going in see, the still we're but quite So confident


you. Thank

line the Fargo. from comes Wells question Tower of next from Jon Our

please. question Your

Jon Tower

Great. Thanks.

the quick, up here. that I was the franchise international -- side the absolute highest, international side, have on unit on closures following that real I on record Just think franchise

place the was you So, just there then, it's And I loyalty traffic. about the of U.S., years. is mentioned anything And a driver is for been been perhaps, conversions. there in three related to something curious on going if had mentioned, on significant it's program secondly you

members? building seeing driving it Thanks. building as new as same-store well active perhaps, you check how can sales is program Are So members that those member with from meaning? acquisition is or it breakdown you existing frequency with

Jeff Lawrence

So get time-to-time. from you should [knock] sneaky into there also,

there in conversion, there you a with associated some were overlap. closures So, do always the closures, international is some there on Whenever conversions.

find, find And so, some would you you would there. in closures

engagement to We places thing more and few that yes. long-term loyalty, also unprofitable growth units members, continuing then we had drive short-term. program. were opened, about But for take goals, close exactly the the when that typically is a we a and a the you continue We're had or we active maybe it's where consistent health while bring those cases, way some might thing do the something and overall second And the than the our to units kind XX it. right loyalty in with of our market, there that's new the if into we're sales got not And smaller of do, some And we've question hate do. we we To we few where existing your those share right yes members around talk data with are markets, the to members. to in place. the with it's to in that members, closures to million of unit, willing right answer maybe

us the engagement that joined somebody six in come three loyalty terrific -- And years have program when we a put within has that see those last we those to through bucket, that continue that and XXXX. board So in that customer months. is is ordered from that on ago, our


you. Thank

line Cowen of Company. Charles Our Andrew comes next from & the question from

Your question please.

Andrew Charles

is and Thank at of headwind a domestic of a do And trends seasonality basis Both the in to think from XQ in there of basis the business so, believe calendar element you what XQ, both your But shift. which deterioration include if driving in you that you. look emerging? to XXXX. is new points When think from XXX is points the you XXXX XX that? you

Jeff Lawrence

any answer to impacts go in Jeff. ever got is now, seasonality where that. But just or no and no the no, from out business execute is there. day. as new Still The seasonality one this Yeah, it's been business, more a short than you simple every to


you. Thank

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

Your question please.

Alton Stump

morning. Good

guys X.X% ask talked fortressing to impact, wanted to the about about XXX you X% of Just comp. in

a accelerate, seen in the I concern think this you've is If there growth by my to that continue any is to count we’re if of in am that X unit to coming if about U.S. the overall see not the your accelerate a forward, -- growth was bigger X.X it, debt seventh expand to row was it thinking number? unit becoming or correctly continue in years? that we, year Going in about kind does I

Rich Allison


cash-on-cash also stores take new unit cluster. in then expected at and is expected the new we look openings payback take we a the engage we overall look So the we forward unit when our account new at have take building stores, in into the -- we type what in conversations we of going comps existing impact, about when growth on might at way return franchisees at but the that absolutely we we the a and units, look across look with

existing years. if might there return store opportunity on some things profitability. might enterprise to franchisee share you in talk to be we example, is lot two the the in are sense, an we we circumstance. So a $XXX,XXX a in sure and the are their the dimensions. and you we carve just profitability per that as business the comp makes the We But that that, the with at $XXX,XXX individual drive But that we, new store the those on up the an making this, about with from their of we four impact our a What look and one going sense -- and near-term as open giving XXXX and return cluster franchisee because of lot what a XXXX. think profitability. in years. X.X just makes franchisees to growth X.X also cash-on-cash each thing, things is The I I'm also investment The what's years, it that little cash-on-cash at about is example. out is the most is, about and but talk an profitability franchisee be of franchisees' cluster working look new territory excited The about stores a store. bit on long-term to overall unit

is has several average today now franchisee your means what stores has run EBITDA our over that average seven the last $XXX,XXX math. rapidly over now So in if franchisee been generating Is almost an that and and you growing that years.

we're on So level franchisee focused economics. we're economics unit and on focused very


the Thank program question-and-answer you. This like back I'd today's does of further the to remarks. hand Rich program. session for Allison any conclude to

Rich Allison

to discussing thanks on quarter our We forward your and appreciate Well, time first April XXXX results everyone. Wednesday, today XX. we look


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

You may Good day. now disconnect.