Russell Weiner: And let me just put some, maybe some perspective on those closures. The ones that Russia obviously were talked to ahead of time, Domino’s Pizza enterprises announced over the summer that they were going to have closures as part of a kind of a short-term business adjustment on their side And we saw those in Q2 and Q3. What Domino’s Pizza Enterprises also did was they talked about that they were not going to change and they were still bullish around their long-term outlook for 2033 still at 7,100 stores. So I see this as kind of both of these as one-time-ish events. You take those two blocks of closures out, we closed less than 15 stores in international this quarter. And from an opening perspective, still stayed right around 1,000 store openings for trailing 12 months, we opened up over 1,000 in 2021 over 1,000 in 2022, and so that’s just a little bit more color around our international store openings.
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. Good morning. In the press release, you talked about the lift from third party and loyalty hitting in 2024. I’m wonder about this quarter, what sort of net same-store sales impact do you expect from loyalty in 4Q, the higher orders minus perhaps higher redemptions. And come to think of it, I’m not really sure what sort of lift you’re expecting from loyalty over time. I think for some reason, we were thinking something like a couple of percentage point boost from loyalty and more of like a step change, not something that ramps, and of course, the magnitude and the ramp part, I’m not really sure about either. I’m just wondering how you’re thinking about magnitude and perhaps a ramp phase to loyalty. Thanks.
Russell Weiner: Yes. Thanks, David. I think both Sandeep and I will answer this one. On loyalty, loyalty is one of a few things. We’ve got loyalty, Pepperoni Stuffed Cheesy Bread, Emergency Pizza. All things that we absolutely think are going to know are going to affect our Q4 numbers, and we’re seeing that out of the gate. The third party piece will start in Q4 in December and that will be ramping up certainly big time next year. From a loyalty perspective, as soon as we get more information on how that is affecting the business, we’ll let you know. But I can tell you, short-term, folks are interacting with the loyalty program and our innovation at a higher level than I expected coming in.
Sandeep Reddy: And Dave, I want to just add something to that, just so you can get a sense of cadence in terms of what’s been happening with the comps and what our expectations are for Q4. If you note, we actually had a reduction in the impact of pricing from 2% roughly to a little bit under 1% in our expectations for Q4. And this was driven really by the increased redemptions that we were seeing from loyalty, Domino’s Rewards, which is great because it actually is more than offset by incremental transactions, and that is implicit in our expectations of the comp that we’re talking about for the fourth quarter being positive, which if you think about it, if you have a roughly 1% impact on pricing, this implies transactions are nearly flat or better in the total business.
And so this – the good news about this is we expect this improvement in transactions to come both in delivery as well as carryout. And remember that carryout, we’re lapping the Mix & Match promo pricing, which was done in October 2022, so we lose a bit of pricing over there, but we still expect to have consistent trends in the fourth quarter on carryout too. So feeling really good about the balance of the impact of the loyalty program on Q4, and it’s definitely an accelerator of transactions.
David Palmer: Thank you.
Operator: Thank you. One moment for our next question. And our next question comes from the line of Brian Harbour from Morgan Stanley. Your question please.
Brian Harbour: Thanks. Good morning, guys. I don’t think you commented just on food basket. But is it fair to assume you’ve seen a couple of quarters of that being lower. And as we think about store margins and supply chain profits that, that probably continues into the fourth quarter at this point?
Russell Weiner: Yes, Brian, a really good question on the food basket. I think we – when we reported in July for the second quarter, there was so much volatility, particularly on cheese. That volatility did continue, but the trend line that we drew in the third quarter ended up still being favorable to us, as you saw and what we reported for minus 1.7% in the basket. Things are still a bit volatile, but I think overall trends seem to be pointing to favorability. And when you think about the franchisee store profitability going from 150 to 155, a big driver of that improvement, whether improved basket, both in Q3 and perhaps a little bit of an expectation of a little bit more tailwind as we go into the fourth quarter. So that’s how we see the food basket and franchisee profitability, but supply chain margins also – if food baskets ends up being deflationary in the fourth quarter will benefit from a margin standpoint.
Brian Harbour: Thank you.
Operator: Thank you. One moment for our next question. And our next question comes from the line of Andrew Charles from TD Cowen. Your question please.
Andrew Charles: Great. Thank you. Sandeep, I was hoping you could help just with the supply chain and how we should think about that going forward. The productivity benefits continued in 3Q as you indicated in 10-Q. With this still around the neighborhood of 70 basis points and at least versus our model, it looks like the labor cost in the supply chain business were a bit higher in 3Q than they were in 2Q. Could you speak to that the durability of that as well?
Russell Weiner: Yes, Andrew. I think when we look at supply chain, you’re right, the biggest driver of the margin improvement is the procurement productivity that has been there earlier, and we expect that to continue into the fourth quarter as well. When we look at what happened in the third quarter, I just talked to Brian about this and we got the benefit of the food basket actually impacting the margin slightly favorable. There was a little bit of labor pressure, but I think a lot of that is more driven by the opening of the Indiana center that we’ll lap over. So overall, I think, we’re very happy with the trends that we’re seeing in supply chain margins. And if you go back to the – the answer I gave to Dave on transactions, guess what that does. It’s going to drive more volume through our supply chain centers and therefore, drive more profit out of our supply chain centers.
Andrew Charles: Very good. Thanks.
Operator: Thank you. One moment for our next question. And our next question comes from the line of Chris O’Cull from Stifel. Your question, please.
Chris O’Cull: Thanks. Good morning, guys. Russell, I appreciate your comments earlier about the importance of Domino’s offering the best value to consumers. But Domino’s won’t be offering international deals like Mix & Match on the Uber platform. So I’m trying to understand what proposition Domino’s can offer on Uber that will be as effective against the competition? And I’m also curious if you think Domino’s can obtain a similar share of the 3P pizza delivery market that it has off of the 3P platform.
Russell Weiner: Chris, great question. Let me take a step back and just make sure I talk about our strategy, both on our assets and then on Uber and I’ll get to your question, but I want you to understand kind of the broader piece here, because at the end of the day, we want to drive incrementality. And when you think about our assets, if you’re a customer and you want the best prices or you want the best loyalty program, you’re going to come to dominos.com. There are going to be some customers, and that’s why we’re going into this marketplace. That are either only Uber customers or maybe have both. And because of that, what we want to make sure we’re doing is, price it in such a way that if we don’t have consumer incrementality, we at least are positive on the margin side for our franchisees.
