Russell Weiner: Yeah. Thanks, John. We do price scraping on a — I think either weekly or bi-weekly basis on delivery fee. And so, what’s important to understand is the recommendations to our franchisees, they’re are based on the competitors that are out there, kind of the ones that have stores that are more direct competitors, whose pricing is probably a little bit lower than when people buy things on the aggregators. You’re right though, on aggregators, so that people may sign-up for programs where delivery may be reduced cost or free, but at the end of the day, particularly our customers looking at exactly what you said, they probably don’t call it total landed cost, they just call it, is it a bargain, is it a value. And as long as we’re doing that, we’re aligning competitively with the local competition through our pricing there. And we’ve got best pricing on dominos.com, that’s the balance that we’re looking for.
Operator: Thank you. And our next question comes from the line of Chris O’Cull from Stifel. Your question please.
Chris O’Cull: Yeah, thanks. Good morning. Russell, you mentioned the company is seeing more individual orders on Uber Eats channel. And I was just wondering, does this create an opportunity to be more aggressive in promoting non-pizza items on the channel and maybe even attempt to drive sales during the lunch day part. And also, as the company share a voice on the platform right now among the pizza competitors, is that similar to what we might see outside of the channel?
Russell Weiner: Chris, on that second one on share of voice, inside versus outside the channel, I’ll have to get back to you on that one. That’s not something that I know off the top of my head. As far as what it is that we sell on Domino’s, we have been — I’ve been here a long time and I’ve seen us promote just pizza on media, and I’ve seen us promote just our individual items like sandwiches or pasta. And really the magic for us, the big sales becomes when — I’ve used this before, this idea of pizza plus, when you offer both, and that’s really what Mix & Match is all about. And so, what we don’t want to do is we don’t want to slow down momentum in what’s really working through experiments in other areas. We have looked at lunch before.
We got a nice lunch business, but that business is not individual users. And so, I think what this allows us to do is tap into individual users who, frankly, are willing to spend a lot more money on a per person basis than they would through us. And then, once they’re part of Domino’s, obviously they’ve got the ability to then go back and buy those items and get loyalty points for it and all that. So that’s probably the better way to think about it, is we’re at our best when we promote our entire menu.
Operator: Thank you. And our next question comes from the line of Andrew Strelzik from BMO Capital Markets. Your question please.
Andrew Strelzik: Hey, good morning. Thanks for taking the question. I wanted to ask about the U.S. store growth pipeline. The first half of the year, I know, is supposed to be roughly flat year-over-year, and it seems like it’s tracking there. But how are you seeing that pipeline build with the comp strength and margins obviously moving in the right direction? And just wanted to get a sense from you on, when you expect and your confidence that you’ll see that inflection higher in the back part of the year and even as we move into 2025 and beyond? Thanks.
Russell Weiner: Yeah, thanks. We’ve got visibility to the pipeline through the remainder of this year through next year, and I feel really good about hitting the 175 plus number. Stores tend to be a lagging indicator of performance. And as you can expect with profits going up, with order counts going up, we’re becoming a more and more attractive proposition every day to our franchisees. But regardless of Q1, you should know, before these results, the pipeline was clear on the 175 plus.
Operator: Thank you. And our next question comes from the line of David Tarantino from Baird. Your question please.
David Tarantino: Hi, good morning. Russell, I had a question related to sort of one of the comp drivers that maybe gets underplayed, and that’s the advertising approach. It seems like you made quite a big evolution in the advertising versus what you’ve done in the past in the first quarter and maybe before the first quarter with a lot more focus on the food and the value as opposed to some other topics. So, I was just wondering if you could give us a sense of how much of a comp driver you think that was, if it’s even easy to separate that out from the others. Thanks.
Russell Weiner: Yeah. David, I’m really glad you noticed. The team, I think, has done a fantastic job. We brought a brand new food photographer — filmmaker on, and the deliciousness on a Domino’s ad. It’s a different ad than it used to be. And you take that, you combine that with the talk value, the renowned value I talked about earlier, and that stuff breaks through. I have a lot of people I know, saying, “Wow, it feels like Domino’s is advertising a lot more this year than it ever did before.” And the answer is not really. It’s what’s happening is what we’re doing is breaking through more, and that’s where you want to be. And I think when we talked about Hunger for MORE, the M and the R, the most delicious food and the renowned value, were going to be the two things we’re going to lean into. So, I appreciate you noticing that.
Operator: Thank you. And our next question comes from the line of Brian Harbour from Morgan Stanley. Your question please.
Brian Harbour: Yeah, thanks. Good morning. Maybe just on the operational focus on dough, what was the nature of that and what’s still planned for this year? Are those things that sort of have a cost benefit in your view, or is it more just about kind of product consistency and service time?
Russell Weiner: Yeah, thanks. It really is about consistency. And consistency begets repeat purchase. And so, the way I think of it is we in the U.S., we sell about 1.5 million pizzas every day. We don’t want to look at it that way. We want to look at, we sell one pizza 1.5 million times. Every pizza that we make is a chance to delight a customer or disappoint a customer. And so, the training we had last year was a little bit more focused on circle of operations technology, and you’re seeing the results now in delivery times. The stuff we’re doing this year, as you said, the first sprint was on the dough, then we’ve got ingredients and baking. That’s all about the consistency. And consistency really drives repeat purchase. So, if you get that right, plus you have the loyalty program on top of that, then you have two things driving repeat purchase, and that’s where we want to be. We think this can be offensive for us, an offensive move on consistency.
Operator: Thank you. Our next question comes from the line of Peter Saleh from BTIG. Your question please.
Peter Saleh: Great. Thanks. Yeah, I just wanted to ask about the U.S. pizza category in general. Russell, do you think it’s taking share at this point in time? I think coming out of COVID, out of really ’21, there was some pizza fatigue going on. That seems to have subsided. Just curious, if you think the category in of itself is growing faster than it had been in the past couple of years, or are you guys just taking share with some of the self-help initiatives that you have in place? Thanks.
Russell Weiner: Yeah, I think we’ve returned to where we were, what our calling call was — calling card was over time, which is that this is a category that is tremendous and it’s growing kind of in line with population. What we have always done is we’ve been, what I call, an equal opportunity share stealer. And frankly, we lost that last year, two years, and we’re back. And so, we’re seeing those same dynamics and these self-help initiatives are helping drive share in delivery and carryout. I mean, the carryout numbers are just tremendous. And, one of the things we always talk about is the incrementality of carryout. And so when we split a store, 80% of the carryout volume is incremental. And so, if carryout is growing, growing big time, that is yet another reason in addition to store profitability, why franchisees are going to want to open up stores. And so, I think all this stuff is a cycle that’s positive for us.
Operator: Thank you. And our next question comes from the line of Jon Tower from Citi. Your question please.
Jon Tower: Great. Thanks for taking the question. I’m curious, I wanted to come back to your comments earlier, Russell, regarding the loyalty program. I think you had mentioned in the U.S. that you’re seeing some pretty good uptick from new lapsed users, light users, but I’m curious to hear about how existing loyalty members have responded to the program so far and all the changes that have taken place. And then separately, in terms of the consumer demand, obviously, you’ve had a lot of promotional — heavy promotional windows during the fourth quarter and into the first quarter here. How has the consumer responded to the brand outside of those windows?
Russell Weiner: Got it. Well, first on the loyalty program, I think it’s safe to say that not only new customers, but existing customers are really engaging in the program. If you’re an existing customer and you had 50 points in your loyalty bank, you woke up when we launched this new program and you were able to get two free items instead of zero. And so, there are a lot of happy customers who are existing customers there. When you talk about consumer demand, I mean, I love — I get this question a lot, “Hey, guys, it seems like you’re increasing your promotional cadence.” We’re really not. They’re just more impactful, and I think that’s why folks are talking about them more. But we’ve had a 52-week promotional calendar for years and years and years, and the big difference now is just they’re working better.
They’re working better because rather than just focus on price points, we’re focused on things that break cultural tensions. I mean, the carryout tips, everywhere you go — sorry, You Tip, We Tip, everywhere you go today, whether they’re giving you extra service or not, folks are asking for tips. You get that screen up there. In fact, I think maybe after this call, I’m expecting, Jon, you to ask me to tip you. But — and what we’re doing though, is we’re using that talk value to get people to talk more about Domino’s because we’re breaking that tension, and that’s why it feels like we’re doing more. But 52 weeks of promotion is what we’ve done for a long-time.
Sandeep Reddy: I’m going to add something to that, Jon, because I think when you look at the promotional windows and we talked about what’s the cadence outside the promotional windows, it’s very good. But why is it very good? It’s because of the loyalty program. The activity that’s actually generated through the loyalty program is really dispersing transactions and redemptions right through the quarter. And I think that just speaks to the strength of what we’re doing with renowned value and the loyalty program specifically.
Russell Weiner: Yeah, that’s a great point, Sandeep, which I don’t like to admit when Sandeep makes great points, but this was a good one. There are other pieces in the renowned value that are different than what we did before, is to get this value, you have to sign up for the loyalty program, right? You can get Mix & Match, you don’t have to be a loyalty member. But to get the carryout tips, to get Emergency Pizza, to get tipped for your delivery, you have to be part of the loyalty program. And so, what these things are doing is they’re working together versus working separately. And I think you just see the compounding effects of that.
Operator: Thank you. And our next question comes from the line of Jeffrey Bernstein from Barclays. Your question please.
Jeffrey Bernstein: Great. Thank you very much. Just a question on the near-term comps for Domino’s and the industry, I guess. On Domino’s, I know you mentioned the second quarter comp below the 5.6% in the first quarter. I’m wondering whether that surprises you relative to plans at the start of the year. I would think that the ramp in Uber and loyalty and easier compares would more than offset the fate of Emergency Pizza. So, just wondering whether that similarly surprises you. And Russell, on the industry, you mentioned a slowing QSR category in terms of seemingly the macro. Just wondering with you having decade-plus of experience there, does that surprise you? I would think QSR would be viewed as more defensive into a slowing macro and yet perhaps we’re seeing something otherwise. So, just a question on Domino’s and the broader macro. Thank you.
Russell Weiner: I’ll ask Sandeep to talk about the near-term comps, and then I’ll answer your question on transactions.
Sandeep Reddy: Yeah. So, I think on the near-term comps in Q2 that we talked about on the call, really, it’s not surprising us at all. I mean, this is pretty much in line with our plans. We knew that we’ve had great success with Emergency Pizza and we were glad we did that because it actually acquired customers into the loyalty program. But we did see some lift, which I think will kind of normalize as we go into Q2. But to the point we made, making since the beginning of the year, we’re expecting ramping in Uber to happen over the course of the year. So, we expect to be slightly below our Q1 performance, which was very, very good. And we still think Q2 was going to be very, very good, but in line with what we expected.
