Domino’s Pizza, Inc. (NYSE:DPZ) Q2 2023 Earnings Call Transcript

Page 11 of 12

Russell Weiner: Yes. I want to be clear that the ways we’re spending our money is specifically on things that we can measure with something called return on advertising spend, and so that would be how we drive a customer on Google or any other kind of social media or digital media.

Sandeep Reddy: And just…

Jim Sanderson: Okay. Thank you. Yes.

Sandeep Reddy: Just to clarify one thing, I just want to make sure we touch on it. But any promotional activity on the platform would have to be agreed with us. And I think we’ll do that in partnership with them. So, I think that we’ll be thinking through the holistic lens of those promotions.

Operator: Thank you. One moment for our next question. And our next question comes from the line of Danilo Gargiulo from Bernstein. Your question, please.

Danilo Gargiulo: Good morning. Russell, you started the call saying staffing levels are going to be important, and you’re making improvement in staffing. So, I wonder if you could comment on the level of staffing at — in the Domino’s stores, and whether you see any staffing challenges to the service — to service the incremental demand from aggregators if kind of the opportunity come to fruition as you were expecting.

Russell Weiner: Yes, a great question, and I’m going to — we’ll give you a tongue-in-cheek answer to this one is I very much hope and expect that we do not currently have the number of delivery drivers we will need for this incremental volume. But I also know, and I’m confident, based on what we’ve learned through what’s been a struggling time to hire drivers, that we know what it takes now, whether it’s the certain hiring practices, if you look at our new training, if you look at actually our corporate stores and just the turnover numbers going down, as well as the incremental fleet we’re talking about. So yes — do I expect to need incremental drivers? Yes. And yes, I expect to be able to get them.

Operator: Thank you. One moment for our final question. And our final question for today comes from the line of Jeffrey Bernstein from Barclays. Your question, please.

Jeffrey Bernstein: Great. Thank you very much. I guess, putting some closure around the Uber discussion. I know for a long, long time you guys had deemed that a partnership was presumably not in the best interest of the company and franchisees. So, something, I guess, very recently maybe tipped the scales to push you to sign up now. I’m just wondering if you could talk about what kind of puts you over the edge, and I assume there is still some lingering headwinds that you’re still conscious of and watching closely that perhaps where some of the headwinds you were anticipating before. And if you could just share maybe what will be the consideration set at the end of 2024 to decide who you partner with going forward, whether it’s still just Uber or whether you add somebody else, like what would drive that decision? Thank you.

Russell Weiner: Sure. Thanks, Jeff. Really for us, it came down to three elements: scale, scope and incrementality. The scale of the aggregator QSR pizza delivery business is big now. It’s a $5 billion category. We’re the number one pizza delivery company in the country and we don’t sell a single order on it. And so if there’s a $5 billion opportunity, that kind of scale, you can expect us to compete for our fair share. The second is scope, the scope of the deal and the terms of the deal is — are really favorable for us and our international and domestic franchisees. And I said earlier, how now 70% of the stores will have access to potentially orders from Uber. And the last piece is just the incrementality. We are — it’s clear from the work we’ve done internationally and the studies we’ve done here in the states that we know how to manage this as a separate channel and drive incremental volume.

Page 11 of 12