Jon Tower: Great. Thanks for taking the question. I want to zero in on the commerce platform that you’re expanding across number of the brands including Taco Bell now and some of the others that across the globe are hopping onto the platform. Does the company collect any sort of fees from franchisees hopping onto this platform? And if so, how should we think about it rolling into the P&L over time?
Christopher Turner : Yeah, Jon, we are excited about the progress that we’re making on all aspects of the digital strategy. And so, you’re asking about the e-commerce platform, which is a core part of our Easy Experiences capability set. And we talked about some of the benefits that we derive whenever we platform systems like this. We think it really, ultimately drives faster profitable growth for our franchisees and for us the ways that you do that, we talked about the Diablo 4 experience in KFC U.S. It allowed us to implement a marketing campaign much faster than we normally would. And, of course, as you get that platform, across more markets, across more brands, we talked about the big milestone, implementing in Taco Bell, you then are able to implement campaigns in multiple geographies or multiple brands much more quickly, because you don’t have to build integrations for each discrete technology platform that we’ve had previously across the business.
In addition, you’ve got this robust capabilities. At the base as you build tailored front-ends that are relevant to each market and brand on top. So at the end of the day, we’re driving profitable growth for our franchisees and for us through this strategy, franchisees obviously benefit from that and they share in the investments that we make through our digital fees that we have in certain markets. But at the end of the day, if this is an ROI driving move for both our franchisees and for us.
Operator: Our next question comes from the line of John Ivankoe with JP Morgan. John, please go ahead. Your line is now open.
John Ivankoe: Hi, thank you. Obviously, quick service in the US and in Europe has been driven by a very high amount of average ticket increase over 2019, at least. And a lot of that has been price but also the consumer trading up on the menu larger sizes. What have you premiumization, there’s been a lot of different factors of that. I was wondering if you, kind of see – I don’t know if I want to see risk or opportunity for kind of an unwind of that to some extent. Obviously, quick service over time is firstly the franchisors of quick-service have been very focused on driving incremental transactions, because it’s very rare where an incremental transaction doesn’t drive incremental profit. So, do we have an opportunity, I guess over time to kind of think about a higher transaction-driven model, higher dollar profit-driven model that actually might sacrifice percent margin.
I mean, it’s we came off a such an unusual period, ticket growth over the next four years. I am wondering kind of how you see the future in terms of the direction of ticket and transactions?
David Gibbs: Yeah, thanks for the question, John. You’re absolutely right. Obviously, one of the first things that got disrupted in the pandemic was sort of transactions and ticket size. The one thing I would add to the list as you mentioned is also party size. As we became much more of an off-premise delivery business, we did see a number of parties per ticket go up. So that neither translated to a slight decline in transactions, but not in the number of eaters in our business. But the great news is for this quarter, we had good transaction growth in our businesses. And that’s what I when I was talking about a more return to normal. We are seeing more individual meal occasions let the party sites go back down which I think it’s just the reality of coming out of the pandemic.
And our business is growing transactions and growing share all around the world. So, I think you’re probably right. We’re going to get back into that kind of environment and that just not to sound like a broken record, but I feel like we’re winning playing that game.
Operator: The next question comes from David Palmer with Evercore ISI. David, please go ahead. Your line is open.
David Palmer: Thank you. What’s alike in the quarter with the unit growth, the KFC results, that the 30% digital sales growth too. I’m wondering, though I know there’s going to be some curiosity about Pizza Hut, particularly in the US. And then just maybe a comment about whether you see this thing – this division being an ongoing stable same-store sales grower. I wanted to ask because a lots happened and there has improved marketing, innovation like Melts, the third-party delivery, the systems and a lot more profitable today, but big competitors now doing business with third-party delivery and comps were slower in the quarter. So, also I’m sure there’s going to be some curiosity about how you think the brand will do in a slowing economy. So, any sort of thoughts about how you think that brand is positioned well, to be an ongoing same-store sales positive brand? Thanks.
David Gibbs: Great. Thanks for the question. I’ll take the first and then I’ll let Chris talked about the aggregator landscape. First of all, on Pizza Hut, big picture, 7% system sales growth in the quarter is on algorithm. There you can see our nice contributor to Yum!’s overall growth and really importantly, they’re gaining share in the category. If you do the numbers on relative to some of their peers. So, we love what’s going on at Pizza Hut. And a lot of that is the leadership team, Aaron Powell, and the team that he’s built leading that brand are doing a lot of things differently. You’re seeing them innovate with things like Melts, which is bringing in a lot more individual occasions, accessing incremental business for us.
The other thing about the way they’re operating, which gives me a lot of confidence in the future is, we’re able to run brand like a global brand. That hasn’t always been the case. So what you saw with Melts for example, is they are now already in over 50% of the stores around the world. That’s sort of unprecedented for us to be able. You want something in the US, it works pretty well, but every market got their own challenges. You got supply chain challenges. You got different business cases. But they’ve got the whole world united sharing data, sharing best practices and that is only leading to a stronger business for us at Pizza Hut. So, we I think we’re pretty happy with where we are at pizza, particularly when you’re on algorithm and gaining share, that’s a pretty good starting point.
I’ll let Chris talk a little bit about that aggregator space and how we’re thinking about the competitors there.
Christopher Turner : Yeah, look, on the aggregator front by zoom way out at a Yum! level, we’re very pleased with our aggregator approach around the globe and the result that’s produced in each of our brands and in large number of markets around the globe. In Pizza Hut, and specifically in Pizza Hut US, we implemented last year and we’ve been pleased with the incremental customers that we found on the marketplaces and the incremental delivery capacity that we’ve been able to utilize when needed. Of course, keep in mind, this was always our strategy. I wasn’t here in 2018 when the leadership team started this aggregator strategy. But recall that, we knew that team knew that aggregators would have an impact on the industry. We wanted to be where the customers wanted to transact with us and we made an investment in one of the aggregators that gave us a front row seat to understanding how this space would evolve.
And remember, it was our Pizza Hut CEO who actually sat on the Board of that aggregator. That experience helped to define our strategy. We always intended to implement in Pizza Hut and it’s gone as planned. And of course, going forward, we think we have some differentiating capabilities that will help us sustain our competitive advantage in pizza with the aggregators. One of those is Dragontail, which helps to optimize the delivery operations in our restaurants including our interface with the aggregators, plus, we’ve got some first-mover advantages around marketing expertise and talents in that space that we think will help us continue to drive that business going forward in Pizza Hut.
Operator: Our next question comes from the line of Brian Harbour with Morgan Stanley. Brian, please go ahead. Your line is now open.
