Domino’s Pizza(US:DPZ)2023-10-12 18:17Financial Data and Key Metrics Changes - In Q3 2023, U.S. retail sales increased by 0.9%, while international retail sales, excluding foreign currency impact, grew by 9.4% [17] - Global retail sales grew by 5.1% excluding foreign currency impact, driven by positive international sales comps and global net store growth [17] - Operating income margin improved by 190 basis points compared to Q3 2022, with expectations to reach 2021 levels for the year [39] Business Line Data and Key Metrics Changes - U.S. carryout same-store sales increased by 1.9%, while delivery same-store sales decreased by 2.3% [40] - The U.S. system added 27 net new stores, bringing the total to 6,762 stores at the end of the quarter [41] - International same-store sales, excluding foreign currency impact, increased by 3.3%, with a net decrease of 35 stores due to closures primarily in Russia [42] Market Data and Key Metrics Changes - The U.S. four-quarter net store growth rate stabilized at 1.8%, with expectations for improvement in Q4 and into 2024 [19] - The trailing four-quarter net store growth rate in international markets was 5.9%, leading to a global net store growth rate of 4.5% [20] Company Strategy and Development Direction - The company launched a new loyalty program, Domino's Rewards, aimed at increasing customer engagement and order frequency [5][29] - The integration with Uber Eats is progressing, with plans for national rollout by the end of the year, expected to drive incremental delivery volume [7][31] - Focus on innovation, including product launches like pepperoni Stuffed Cheesy Bread and the Emergency Pizza promotion, to enhance customer experience and drive sales [10][11][34] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the future, citing improvements in delivery times and franchisee profitability despite softness in U.S. same-store sales [13][37] - The company anticipates positive trends in Q4 driven by the loyalty program and other initiatives, with expectations for significant growth in 2024 [18][71] - Management noted that the economic environment is prompting consumers to seek value, which aligns with the company's promotional strategies [66][123] Other Important Information - The exit from the Russian market involved closing 143 stores, which has been accounted for in the financial results [38] - The average price increase across the U.S. system during Q3 was 3.2% [16] Q&A Session All Questions and Answers Question: Early reads on the loyalty program - Management noted that the changes in the loyalty program are driving engagement, with lower redemption levels being observed among customers [46] Question: Performance of the Uber Eats partnership - Management confirmed that the pilot markets are performing as expected, with plans for expansion into additional cities [49] Question: U.S. franchisee demand for new stores - Management indicated that staffing levels have returned to pre-pandemic levels, which is positively impacting franchisee demand for new store openings [57] Question: Impact of loyalty on same-store sales - Management expects the loyalty program to positively impact transactions in Q4, with early indicators showing increased customer interaction [92][95] Question: Consumer behavior and market dynamics - Management highlighted that consumers are increasingly seeking value, which is reflected in the company's promotional strategies [66][123]