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

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But then, once the profit per order is established, we have, what we call, a high-volume mentality. And so, we price for proper profitability on a per order basis that will help drive consumer to buy Domino’s more frequently. And so that’s kind of how we look at it. I don’t expect to be at the high end of pricing. What I expect to do — and I think if you look at other restaurants in our categories, I expect our franchisees to be at the high end of profitability, while we’re offering best-in-class value to customers.

Sara Senatore: Thank you.

Operator: Thank you. One moment for our next question. And our next question comes from the line of Dennis Geiger from UBS. Your question, please.

Dennis Geiger: Thank you. And thanks for all the details on the sales drivers, definitely helpful. The third-party partnerships, the carryout and loyalty all seem quite impactful. But Russell, wondering if you could just speak to some of the other maybe slightly less-impactful sales drivers, that e-commerce upgrade, the Summer of Service, some of the tech and the menu innovation that you spoke to and seemingly will be a bigger part of the business going forward. Just curious if you could sort of help frame up how impactful you think about some of those other drivers are. Thank you.

Russell Weiner: Yes. No, sure. I appreciate you, because a lot of times, the headlines are what grabs folks. But actually, it’s the subtext that actually drives the headlines, if you think about it. And so, maybe not talking about those three drivers, but talking about the things behind it, some of which we’ve mentioned already. But really, what we’ve done is, in addition to the significant carryout growth that you’ve seen this year, is we’ve improved the underlying fundamentals of the business. And those fundamentals are going to help us really get the most out of those other drivers that you’ve talked about. So, improved profitability for our franchisees and for us, frankly; Sandeep talked about our operating income margins.

Summer of Service is leading to improved service. So, Dennis, the service this quarter versus quarter last year, we’re 1.9 minutes — almost 2 minutes better than just a year ago and actually better than even last quarter. And so, the discussions, the best practices, just the fact that we’re leaning into service with our franchisees is making it immediate different. We — so we’ve got this morning bunch of franchisees here for Summer of Service, so I can tell you firsthand how excited people are to be here. We’ve already had the equivalent of essentially 50% our stores represented through this building already in Summer of Service. So again, improved profitability, improved service, and then, obviously, the new loyalty program that we discussed.

From an innovation standpoint, what I would tell you is our approach to innovation is purposeful innovation. And when I say purposeful innovation, it’s — we don’t sit and say, “All right, we need this many new products. We need this many technologies. It’s, what’s the global purpose that we’re trying to achieve for this brand over time,” right? And so, we look at, obviously, product being important, and we’ve got two product launches this year, which is significant for us, at least that we’ve mentioned so far. But we also — we believe innovation is more than just new products. In fact, if all you’re doing is new products, in a way, you’re kind of degrading your base product and you’re hurting your service. And so, what we’d like to do is also lean into other things.

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