Russell Weiner: Yes, Dennis. Well, you’ve obviously done good research on the business. You hit a lot of those there. I think it’s – all those things are coming back, right? So the headwind on opens that were there with permitting and all that, those have started to subside. Staffing is back where we needed to. I want to reiterate how proud I am of our system. We are back at 2019 service levels, which is – it’s a big deal, and it talks about where we’ve gotten our staffing to. Second is – the second big chunk is over what folks are seeing on the returns of the businesses they currently own. And as EBITDA continues to go up, if I’m a franchisee, I’d say, wow, EBITDA is at 155 right now, and that’s on relatively flat sales in the U.S. And we know what’s coming in the Q4, and we know it’s coming with Uber in Q1, so today.
And so that there’s a lot of interest to make sure that we service this volume. I think lastly, this carryout business that we’re leaning into, store growth is so important. The franchisees realize that. Right now, when we opened a new store, even when the store is split. So when we take an existing service area, and we split it, about 80% of those carryout customers are incremental. And so when you look at the headwinds that have subsided and you look into the present and the future as the franchisees, there are a lot of reasons to build a Domino’s store.
Sandeep Reddy: And Dennis, I’ll just add on something, because I think we’ve – in previous calls, we talked about the build cost, right, where we expected to – the build costs have gone up about 20% versus 2019. Frankly, build costs are coming in a very similar level for 2023 from what we’ve seen so far. And look, profit has actually gone up. We updated last time to $150 million, now its $155. So obviously, returns are going to be more and more compelling, given that dynamic. And frankly, with the Uber opportunity coming next year, we expect to see even more growth in 2024 in terms of profitability of the stores. So our appetite is very strong.
Dennis Geiger: Thank you guys, appreciate it.
Operator: Thank you. One moment for our next question. And our next question comes from the line of Saransh Gokhale from JPMorgan. Your question please.
John Ivankoe: Hi, this is John Ivankoe. Hopefully, you can hear me. The question is actually on the Microsoft announcement. And I do want to put this in the context of 20-plus years of in-house point-of-sale development a closed system. Obviously, there are significant benefits that came with this closed system but also considerable costs. So I just did want you to frame and I think it’s a five-year agreement that I read in the release, just kind of how you see this balance changing, both from a benefit side. Of the equation, what the franchisees are going to see, what the customer will see, what, of course, you will get as a company, but also the cost side of the equation, this is actually an opportunity to perhaps on a net basis, slow some of the technology spend that Domino’s has actually been famous for over the years? Thank you.
Russell Weiner: Hi. Morning John, that’s great point, as you look back in the history of Domino’s, we certainly have built more things internally when it comes to competitive points of difference. I think we’ve always said, you can’t outsource a competitive point of difference. We do outsource things that are really out there in the field that really are in a competitive point of difference what have we done here in this case. There’s going to be a competitive point of difference, with Generative AI solutions. And we think we’ve got the resources and the pizza expertise internally. What we’ve got with Microsoft is the best in the field externally. And so you take those two things together, and it’s not just cost, it’s also an impact.
This is a journey that if we could pick anyone to do it with, we would pick Microsoft. And so right now, the focus is really on two areas with them, first on transforming the consumer experience by enhancing the order process through things like personalization, and simplification. And the second is streaming – streamlining operations and quality control with some more predictive tools. So yes, this is kind of a hybrid here, best-in-class, both best-in-class pizza, best-in-class AI and our teams are very excited to work together.
Operator: Thank you. One moment for our next question. And our next question comes from the line of Andrew Strelzik from BMO Capital Markets. Your question please.
Andrew Strelzik: Yes. Good morning. Thanks for taking the questions. Maybe just a broader question on the consumer and what you’re seeing there? And how maybe behaviors may be evolving, whether it’s through delivery carryout, domestic international, curious what your analytics are showing you and how things are changing? Thanks.
Russell Weiner: Yes. Our approach, no matter what the consumer environment has always been the same, which is to provide the best relative value for our customers and that hasn’t changed not only the U.S., but internationally. I’d like to point to a couple of best practices that have been exported around our boost weeks. We just had boost weeks in Mexico and Canada with television behind them just like we do here in the States. Those are the best weeks that those countries have had. And so I think just in general, customers are looking for value. Now, what we’re trying to do here at Domino’s is position the value more than just price. And that to me is the beauty of Emergency Pizza. And I want to talk about that a little bit.
Essentially what Emergency Pizza is, is old school buy one get one free as a former marketer, right? But because of the tension in the world right now around the economy and things like that, people, their antennas are up. And so instead of calling it a buy one get one free, our creative marketing department decided – or buy one get one later, which is essentially what this is. You buy a pizza now, you can get your Emergency Pizza whenever you want over the next 30 days. We call it Emergency Pizza. The mechanics are still the same, but the message is going to resonate because of the economic that you’re talking about. So best-in-class value is important, but making sure we break through with not just a value message, a strong brand message is critical, and I think we’re doing that.
Operator: Thank you. One moment for our next question. And our next question comes from the line of Chris Carril from RBC Capital Markets. Your question, please.
Chris Carril: Hi. Good morning, and thanks for the question. So just on the outlook updates, can you expand maybe a bit more on what’s driving the changes there? For retail sales, is it simply international performance to date or are you seeing anything in the current quarter that’s leading to the update? And then on net unit growth, just to clarify, is the Russia exit not a factor in the updated unit growth outlook? Thanks.
Sandeep Reddy: Thanks, Chris. I’ll just answer that question for you. So on the retail sales outlook, I think we’re taking into consideration the nine months, the three quarters that have passed plus the expectations that we have for the fourth quarter and that’s incorporated in what we’re talking about. As you noted, it includes an expectation of positive comps in the United States and an expectation of a strong growth in the international business as well. So I think from a unit growth standpoint, what we have taken into consideration is the closures that have happened internationally. That’s the big driver of the modification that we made over there. But overall I think our U.S. business, as Russell talked about earlier in terms of visibility and trajectory, looks very solid and I think the entire change in unit growth on a global level is based on international business and the closures there.
