The paragraph is an introduction to Domino's Pizza's first quarter 2024 earnings conference call. The operator introduces the speakers and provides instructions for the call. The company's Vice President of Investor Relations, Greg Lemenchick, welcomes everyone and reminds them of the risk factors and disclosures. The CEO, Russell Weiner, discusses the company's strong performance in the first quarter, driven by their Hungry for MORE strategy, which resulted in increased sales, store growth, and profits. He also mentions positive order counts across all income groups in both carryout and delivery segments.

The company has seen significant growth in their lower-income customer base and attributes this to their focus on offering delicious food. They have launched a new campaign highlighting their pan pizza and are introducing a new crust option, New York Style, based on customer feedback. This new crust will be available as part of their loyalty program and is part of their strategy for driving value and increasing customer loyalty. The company also emphasizes the importance of operational excellence in consistently delivering high-quality products, and they have a new service program in place to ensure this.

In the first quarter, Domino's focused on improving their dough and delivery times, resulting in increased pizza sales. Their third pillar, renowned value, is about providing innovative and memorable value rather than just the lowest price. Their Emergency Pizza promotion was a success and drove increased orders and loyalty program sign-ups. The loyalty program has seen significant growth in active members, particularly from new and lapsed customers. The reduced minimum spend for earning points has also led to an increase in carryout customers. The new redemption tiers have been successful in engaging more customers and driving incremental profit for franchisees.

Domino's Rewards and national promotions have been successful in driving sales and profits for franchisees. In 2024, the promotional cadence is expected to be consistent with 2019, with around six boost weeks. The company is also focusing on providing renowned value internationally and tapping into the aggregator marketplace, which is expected to account for 3% or more of sales through Uber Eats by the end of the year. The company is seeing in-line incrementality and a higher percentage of single user transactions on Uber, as well as a stronger response to deals compared to everyday low prices. They are working to fine-tune their marketing and offers for this channel.

Domino's remains focused on driving profitable transactions through Uber Eats, while also prioritizing their own channels. Their franchisees are a key part of their success and they will be highlighting their Hungry for MORE strategy at an upcoming rally. The first quarter results show that their strategy is resonating with customers and they are confident in their ability to meet their short- and long-term goals. In terms of financials, their smart pricing in previous years has led to profit growth for U.S. franchisees and they are on track to achieve their target for 2024. Overall, global retail sales grew 7.3% and U.S. same store sales saw a meaningful increase of 5.6%.

In the first quarter, the company saw an increase in same store sales driven by transaction growth from the new loyalty program and successful promotions. There was also a benefit from pricing and sales mix from Uber, but this was partially offset by a higher carryout mix. The company added 20 new stores in the U.S. and 144 internationally. Income from operations increased due to higher franchise royalty revenues and supply chain margins. The company's outlook for 2024 remains in-line with previous expectations.

The company expects comps to be above 3% for the full year, with a slight decrease in Q2 due to the end of a promotion but a ramp up in Uber sales. International comps are expected to improve in the second half of the year. Net store growth is expected to be driven by 175 in the U.S. and 925 internationally. Operating income is expected to increase by 8% or more, with flat margins compared to 2023. The company is making investments in technology and supply chain to support future sales growth. G&A expenses will be approximately 2.4% of retail sales, and supply chain margins will remain flat with a potential increase of up to 3% due to inflation.

In the paragraph, the speaker discusses the company's recent financial results and their expectations for the rest of the year. They mention that the first quarter had strong results, and they are aiming to exceed their projected 3% growth each quarter. They also highlight the factors that drove these results, such as new product releases and operational improvements. They mention a new value promotion called "You Tip, We Tip."

Sandeep discussed the smart pricing strategy that has led to consistent order count increases in all segments of the business. He reiterated the company's focus on the M-O-R-E formula for future growth. In response to a question about supply chain margins, Sandeep mentioned that the first quarter saw margin expansion, which was slightly higher than expected. However, the overall expectations for the full year remain the same, with procurement productivity offset by planned investments in supply chain capacity.

The company's same store sales in the US accelerated by 300 basis points in the first quarter, with the majority of the increase being driven by order count. The rewards program was cited as a major driver of sales, and the company expects it to continue to drive sales in the future. The team is proud of the results, especially given the current environment for quick-service restaurants.

The speaker discusses the role of rewards and promotions in the company's growth, noting that the reinvented loyalty program has led to increased engagement and customer activity. They also mention that the 3P (third-party) business is more promotional and that the company is adjusting accordingly. The speaker emphasizes the importance of offering the best prices on their own channels.

The speaker discusses the difference between the promotions used by 3P and those used by the company. They mention the importance of renowned value and talk value in promotions and how this has led to an increase in the power of their promotions. They also note that their profit dollar growth is on track and they are not solely focused on margin expansion. Another analyst asks a question about profit dollar growth versus margin expansion from the previous call.

Russell Weiner, CEO of Domino's, and Sandeep Reddy, CFO of Domino's, discuss the current labor situation at the company. Weiner states that the fact that they delivered more orders in Q1 at better delivery times is a sign that labor availability is not an issue. Reddy adds that there is some wage pressure, particularly in California, where they had to increase prices to address wage increases. However, they are focused on maintaining profitability for franchisees and are solving for dollar growth rather than just margin percentages.

Russell Weiner, the ex-marketer at Domino's Pizza, explains that the company focuses on two types of profitability: franchisee profitability and consumer profitability. They have a record of successful smart pricing strategies, which takes into account competition and consumer spending habits, and has resulted in increased profits and order count. There has been strong performance across all income cohorts, and there are no observable differences in how consumers are using the brand. However, there is a trend of difficulty in gaining traffic and orders in the QSR industry.

The speaker discusses the reasons behind the slightly lower growth in international markets this quarter, which was in line with previous expectations. They mention that the tension in the Middle East may be impacting their business, but they do not provide a specific estimate. They also mention that the new loyalty program has been successful in driving frequency among lower-income and lower-frequency customers.

Russell Weiner, CEO of Domino's, discussed the company's first quarter results and the pressure they are seeing in Europe and the Middle East. However, he remains optimistic about the future as they see key markets implementing their "Hungry for MORE" strategy and seeing positive results. He also mentioned the third-party channel having more single item orders and the company is still figuring out how to promote on the platform.

Russell Weiner, CEO of Domino's, discusses their pricing and promotional strategy for the year. He mentions that they are facing increased competition in the promotional space but are still committed to offering the best pricing online. They are also promoting on the Uber channel and have seen an increase in sales through that platform. When asked about the fixed delivery fee, Weiner acknowledges that some stores have a higher fee, but overall they feel confident in their current structure. He believes that customers are still valuing the overall cost of delivery and their increase in orders supports this belief.

Russell Weiner discusses the company's price scraping strategy and how they base their recommendations to franchisees on the pricing of direct competitors. He also mentions the importance of aligning with local competition in terms of total landed cost for customers. On the topic of individual orders on Uber Eats, Weiner notes the potential for promoting non-pizza items and expanding sales during the lunch day part. He also mentions the need to gather information on the company's share of voice on the platform compared to competitors. Finally, he mentions the company's history of promoting both pizza and individual items in their marketing efforts.

The speaker discusses the success of "Mix & Match" in increasing sales and attracting individual users. They also mention the growth pipeline for U.S. stores, which is expected to be flat in the first half of the year but will likely increase in the back half of the year and beyond. The speaker expresses confidence in hitting the target of 175 plus stores and attributes this to the company's improving performance and attractiveness to franchisees.

The speaker, Russell Weiner, is responding to a question about the company's recent financial results. He mentions that the pipeline was clear on the 175 plus, but he also wants to highlight the success of their new advertising approach, which focuses on the food and value of their products. He thanks the questioner for noticing the change and explains that it is breaking through more and generating more talk value. The speaker also mentions the company's plan to focus on dough operations and reveals that there are more plans for the year.

Russell Weiner, CEO of Domino's, believes that product consistency is crucial for the success of their company. This consistency leads to repeat purchases and is a key factor in driving growth in the U.S. pizza category. The company has implemented self-help initiatives, such as improved training and technology, to ensure consistency and improve delivery times. Weiner also notes that the pizza category is growing in line with population and they are focused on taking advantage of this growth through their consistent product and loyalty program.

The speaker discusses the success of their loyalty program, noting that both new and existing customers are engaging with it. They also mention the positive response to their promotional windows and the increase in carryout sales.

The speaker addresses the misconception that there has been an increase in promotional cadence at Domino's, explaining that they have had a 52-week promotional calendar for years. They attribute the success of their promotions to their focus on breaking cultural tensions and the effectiveness of their loyalty program. The loyalty program requires sign-up to access certain deals, which has contributed to the program's success.

The paragraph discusses the impact of various initiatives on Domino's comps and the industry as a whole. It mentions how the loyalty program, Emergency Pizza, and partnerships with companies like Uber are working together to drive growth for Domino's. The Q2 comps, which were slightly lower than the first quarter, were in line with the company's expectations. The slowing QSR category in the industry is not surprising and is being closely monitored.

The company expects to perform slightly below their excellent Q1 results but still expects a strong Q2. They have taken pricing in response to market inflation, but are now focused on providing value and profitability for customers and franchisees. They have maintained consistency in their product and have seen positive results in their e-commerce business.

The speaker discusses the importance of pricing consistency and meeting customer expectations in the 2022 year. They also mention the success of third-party delivery internationally and how it has been rolled out in the US, with initial findings showing that it has brought in mostly incremental customers. The speaker also mentions the promotional nature and profit of this delivery method.

The speaker was asked about the company's ability to handle increased demand and improve delivery speed. They explained that their business scales well and they have made back-end improvements to make orders more scalable. They also mentioned that being a driver for Domino's is now an attractive job, and this has helped with hiring. The speaker was then asked about the New York Style pizza innovation and how it ties in with other promotions and drives new consumption. They responded by saying it is a great question and did not provide further details.

The speaker discusses the launch of a new product, New York style pizza, which has been tested and found to be popular among customers who prefer a thinner, foldable crust and high-quality ingredients. The product is not a limited-time offer and is expected to become a permanent fixture on the menu. It is available in all three sizes and can be part of a promotional deal. The speaker thanks the listeners for joining the call.

This summary was generated with AI and may contain some inaccuracies.