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

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We will have the best service experience, we believe, in the pizza or restaurant industry. The only thing we care about is getting the pizza to your house warm and hot and delicious. The important thing, and this is actually part of my opening remarks to our franchisees in Summer of Service, we’re the only ones who from the time you order make your product, and the only person who touches it next is you, as the customer. We make it and we deliver it. And we just think that’s really, really special. Second, it’s a premium price, but Domino’s has good prices. Even our menu prices, we’ve got a significant number of things that are going on in menu prices. So, I fully expect us to be of value there. And yes, you’re right, on service times, I expect not only the service to be at the high end, and when I say high end, the good end of that.

But when you get the product, that experience is going to be great because it will never have left Domino’s hand. Finally, we will be spending marketing money, but it’s important to understand two things. One is, the only place we’ll be spending our marketing money is on the platform. We won’t be spending our money to drive consumers to the platform. But once they’re on the platform, we, of course, want to drive them to Domino’s, and we’ve negotiated a return on advertising spend. That’s in line with how we buy the rest of our digital media. And so, we think it’s going to be a profitable one. But we know how to buy digital media on any platform. So I’m excited to see what we can do there.

Operator: Thank you. One moment for our next question. And our next question comes from the line of David Palmer from Evercore ISI. Your question, please.

David Palmer: Thanks. In the prepared remarks, you talked about how Domino’s was on its way to restoring growth in U.S. delivery. It’s great to just hear a mention of that. And is your thinking that the Uber Eats deal will get you to U.S. delivery same store sales growth? Or are there other major factors you’re contemplating when you’re targeting that? And I ask that because the lower check minimum for loyalty sounds like it would be helpful to carryout transaction, but it’s unclear what that would mean for delivery, if anything. And then, maybe for Sandeep, did you contemplate this move to aggregators over a multiyear period when you lowered the multiyear growth targets earlier? Thanks so much.

Russell Weiner: Yes, David. The loyalty program is really not just focused on carryout. I mentioned the carryout piece because that’s really the front end on ticket. We expect, obviously, through this deal as well, to get a lot of customers really interested in Domino’s Pizza. And so, we want to have interactions for delivery customers at the low end, and that’s one of the incremental things that we’re driving here.

Sandeep Reddy: Yes. And Dave, just to add on to your second question, which is, was the aggregated deal contemplated when we lowered the two- to three-year outlook that we provided February? No, it was not. At that time, we had not gotten to the point where we thought we were going to actually do it. And so, I think this is — that’s just the context we should have.

David Palmer: Thank you.

Russell Weiner: Thanks.

Operator: Thank you. One moment for our next question. And our next question comes from the line of John Ivankoe from JPMorgan. Your question, please.

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