Good day, and thank you for standing by. Welcome to the third quarter 2022 Domino's Pizza earnings conference call. At this time, all participants are in a listen only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one one on your telephone. Please be advised that today's conference is being recorded. I would now like to hand the conference over to speaker today, Ryan Goers, Vice President of Finance and Investor Relations. Please go ahead. Thank you, and good morning, everyone. Thank you for joining us today for our conversation regarding the results for the third quarter of 2022. Today's call will feature commentary from Chief Executive Officer, Russell Weiner, and Chief Financial Officer, Sandeep Reddy. As this call is primarily for our investor audience, I ask all members of the media and others to be in a listen-only mode. I want to remind everyone that the forward-looking statements in this morning's earnings release and 10-Q also apply to our comments on the call today. Both of those documents are available on our website. Actual results or trends could differ materially from our forecast. For more information, please refer to the risk factors discussed in our filings with the SEC. In addition, please refer to the 8-K earnings release to find disclosures and reconciliations of non-GAAP financial measures that may be referenced on today's call. Our request to our coverage analysts. We want to do our best this morning to accommodate as many of your questions as time permits. As such, we encourage you to ask only one part question on this call. Today's conference call is being webcast and is also being recorded for replay via our website. With that, I'd like to turn the call over to our Chief Executive Officer, Russell Weiner. Thank you, Ryan, and thanks to all of you for joining us this morning. I'm encouraged by our global performance during the third quarter. Excluding the negative impact of foreign currency, global retail sales grew almost 5% for the quarter, resulting in a three-year stack of +28% versus Q3 of 2019. We, and our franchisees opened over 200 net new stores during the quarter and over 1,100 over the trailing four quarters. 44 of our international markets opened at least one net new store, demonstrating the continued strong global demand for Domino's. Our team members and franchisees around the world have continued to show the agility and perseverance required to operate in a volatile macroeconomic environment. I wanted to start the call by going a little bit more in-depth on our US business and some key initiatives. First, most important, the Domino's brand is as strong as ever. Our research shows the brand health remains at pre-pandemic levels, and we have maintained our lead over relevant QSR competition in critical brand health metrics like Net Promoter Score and taste and value. All of these are key indicators of short and long-term performance. Next, same-store sales. Same-store sales in the U.S. were up 2% versus Q3 of last year. When we look at our business on a three-year stack, which we'll continue to do for as long as it remains useful to put in perspective any COVID impact, same-store sales were up almost 18% versus Q3 of 2019. This represents a sequential improvement in three-year comps from Q1 and from Q2. Now, carry-out. Carry-out continues to be a growth lever and a massive opportunity for us. As you know, while Domino's started as a pizza delivery company, we began targeting the carry-out segment with specific offers in 2011. That effort has paid off, as NPD share data shows that we became the number one carry-out pizza brand in the U.S. at the end of last year. We continued to grow the carry-out business in the third quarter. Carry-out same-store sales were up almost 20% versus Q3 of 2021, with a three-year stack of +35% versus Q3 of 2019. Most importantly, we continue to see tremendous runway ahead in our carry-out business. On the delivery side, the pricing we took on our national offer for delivery performed as our proprietary research predicted. Going from $5.99 - $6.99 on our delivery Mix & Match deal was the right move. Given the continued inflation we have seen, our analytics now indicate we should take pricing on our national carry-out deal as well. We will continue to balance customer value and franchisee profitability by taking our carry-out Mix & Match deal from $5.99 - $6.99, starting on October 17th. From a delivery capacity perspective, we saw progress throughout the quarter resulting from our initiatives in this area. While we only have visibility to our corporate stores, the number of job applications and new hires have increased throughout the year. At the end of the quarter, we were more or less back to 2019 levels as far as applications and new hires per week. Staffing remains a constraint, but my confidence in our ability to solve many of our delivery labor challenges ourselves has grown over the past few quarters. Our delivery service also showed improvement throughout the quarter. While we still have work to do to get back to our high standards for delivery service, I am encouraged by the progress we've made so far. Estimated average delivery time has improved every quarter this year. Additionally, our system is all in on another Boost Week for Q4, indicating their confidence in handling the increased volume. A Boost Week in each of three consecutive quarters represents a return to our pre-pandemic Boost Week cadence. Finally, with regard to phone orders, around half our stores in the U.S. are now connected to call centers to help answer at least some of their calls. Now moving on to our corporate stores. There we are continuing to make moves to strengthen that business and the Domino's brand. We re-franchised corporate stores in Utah and Arizona after the end of the quarter. These transactions provided the opportunity to bring in several fantastic existing franchisees who will further evolve and accelerate growth in these markets, as well as three new franchisees ready for the opportunity to own and grow with Domino's brand. These transactions align with our strategy to utilize our corporate store platform to unlock growth by buying stores, such as our transaction earlier this year to purchase stores in Michigan, and selling stores, such as the 2019 transaction to re-franchise in New York. I visited our corporate stores in Houston in Q3 and was happy to see progress and get feedback on some of the operational initiatives we're testing. As we have said, it is critical that we drive efficiency and effectiveness to benefit our customers and simplify jobs for our employees. I look forward to sharing more about these initiatives as we continue to learn. Now for more detail on Q3 results, I'd like to turn it over to our CFO, Sandeep Reddy. Sandeep. Thank you, Russell, and good morning to everyone on the call. I'll begin my remarks with updates on the actions I've previously outlined to improve our long-term profitability. First, we are continuing to examine and evolve our pricing architecture. During the third quarter, the average price increase that was realized across our US system was 5.4%. As Russell mentioned earlier, we will adjust our carryout Mix & Match deal from $5.99 - $6.99 on October seventeenth. As a result of this update, we expect the realized pricing to increase to approximately 7% in the fourth quarter. Second, efficiencies in our cost structure as we seek to ensure that revenues consistently grow faster than expenses. We saw a sequential improvement in the year-over-year contraction of operating income margin as a percentage of revenues from 180 basis points in Q2 to 160 basis points in Q3. We need to continue this trend. Third, we realized a sequential improvement in U.S. same-store sales from -2.9% in Q2 to +2% in Q3, mostly driven by a smaller decline in order count. Now our financial results for the quarter in more detail. Global retail sales decreased 1.6% in Q3 2022 as compared to Q3 2021. When excluding the negative impact of foreign currency, global retail sales grew 4.7% due to positive sales comps in the U.S. and sustained global store growth momentum over the trailing four quarters, lapping 8.5% global retail sales growth excluding FX in Q3 2021. As we have discussed in the past, we believe it remains instructive to look at the cumulative stack of sales across the business anchored back to 2019 as a pre-COVID baseline, and will continue to do so for as long as we believe it is useful in understanding our business performance. Looking at the three-year stack, our Q3 2022 global retail sales, excluding foreign currency impact, grew 28% versus Q3 2019. Breaking down total global retail sales growth, US retail sales increased 4.1%, rolling over a prior increase of 1.1% and are up more than 26% on a three-year stack basis relative to Q3 2019. International retail sales, excluding the negative impact of foreign currency, grew 5.2%, rolling over a prior increase of 16.5% and are up more than 30% on a three-year stack basis relative to Q3 2019. Turning to comps. During Q3, same-store sales for our US business increased 2%, rolling over a prior decrease of 1.9% and were up 17.6% on a three-year stack basis relative to Q3 2019, representing a sequential 0.9 percentage point improvement from Q2 on a three-year stack basis. Breaking down the US comp, our franchise business was up 2.2% in the quarter, while our company-owned stores were down 1.9%. The estimated impact of fortressing was 0.7 percentage points during the quarter across the US system. The increase in US same-store sales in Q3 was driven by an increase in ticket growth, which included the 5% in pricing actions I mentioned earlier, partially offset by a decline in order count. As we have previously shared, we believe it is instructive to break our US stores into quintiles based on staffing levels relative to a fully staffed store to give a sense for the magnitude of the impact of staffing. Looking at Q3 same-store sales, stores in the top 20%, those that are essentially close to fully staffed on average, outperformed stores in the bottom 20%, those that are facing the most significant labor challenges by less than six percentage points. This is down sequentially from the seven percentage point gap we saw in Q2 between the top and bottom quintiles, showing improvement in the lower quintile stores' ability to meet consumer demand. Now, I'll share a few thoughts specifically about the carryout and delivery businesses. The carryout business was strong in Q3, with US carryout same-store sales 19.6% + compared to Q3 2021. On a three-year basis, our carryout same-store sales were up 35% versus Q3 2019. The gap between the top and bottom quintiles based on staffing levels remained relatively small during the quarter, highlighting both strong consumer demand and the lower cost to serve relative to delivery orders. The delivery business continued to be more pressured. Q3 delivery same-store sales declined by 7.5% relative to Q3 2021. Looking at the business on a three-year stack, Q3 delivery same-store sales were 8.4% above Q3 2019 level. When we look at the quintiles relative to the delivery business, we continue to see a more pronounced difference in performance. We saw an eight percentage point gap in delivery same-store sales between stores in the top 20% and those in the bottom 20%. While we continue to see a gap in performance between the top and bottom quintiles, this represents a sequential improvement from the 11 percentage point gap in the second quarter, and the 17 percentage point gap in the first quarter. A point to note is that despite the decline in same-store sales in the past year, our pizza delivery QSR market share based on NPD data is up modestly over the prior year as we see a similar decline in the size of the delivery market over the past year. This decline in pizza delivery QSR is potentially attributable to a shift of delivery to dine-in as consumer behavior starts to revert to pre-pandemic habits. In fact, the pizza delivery QSR market is still up almost 30% versus three years ago, despite the recent decline. Our market share in total pizza QSR, which includes delivery, dine-in, and carryout, has held steady over the past year and is up by more than 200 basis points versus three years ago. The overlap of our customers who order both delivery and carryout continues to be relatively modest and is trending slightly above our historical overlap rate of 15%, pointing to each channel as a relatively unique business. Shifting to unit count, we and our franchisees added 24 net new stores in the U.S. during Q3, consisting of 27 store openings and three closures, bringing our US system store count to 6,643 stores at the end of the quarter, which brought our 4-quarter net store growth rate in the U.S. to 2.7%. With our strong four-wall economics, we remain bullish on the long-term unit growth potential in the U.S., and we maintain our conviction that the U.S. can be an 8,000+ store market for Domino's. New store paybacks remain strong, with stores opened in 2018 averaging around three-year paybacks and stores opened in 2019 on track to deliver a similar performance. Same-store sales, excluding foreign currency impact for our international, declined 1.8%, rolling over a prior increase of 8.8%, and were up more than 13% on a three-year stack basis relative to Q3 2019. Similar to the second quarter, we faced the headwind of the negative year-over-year impact of the expiration of the 2021 VAT relief in the U.K., our largest international market by retail sale. This resulted in a negative comp for the quarter for international versus a slightly positive comp without this unfavorable U.K. VAT impact. The year-over-year impact of expiration of the 2021 UK VAT relief will continue while we lap the reduced rates through March 31st, 2023, but with a lower impact as the UK VAT relief was reduced from 15% to 7.5% last year on October 1st. Our international business added 201 net new stores in Q3, comprised of 263 store openings and 62 closures. Our closures were driven by our master franchisee's exit from the Italian market, as well as another round of closures in Brazil as our master franchisee there continues its work to optimize the store base in the market. This brought our current full-quarter net store growth rate in international to 8.1%. When combined with our US store growth, our trailing 4-quarter global net store growth of 6.2% continues to fall within our two- to three-year outlook range of 6%-8%. Turning to revenues and operating income. Total revenues for the third quarter increased approximately $70.6 million or 7.1% from the prior quarter, driven by higher supply chain revenues due to a 13.4% higher market basket pricing to stores and US stores revenues resulting from retail sales growth. These increases were partially offset by changes in foreign currency exchange rates, which negatively impacted international royalty revenues by $7.9 million during Q3. Our consolidated operating income as a percentage of revenues decreased by 160 basis points to 16.5% in Q3 from the prior quarter, primarily driven by food basket and labor cost increases. These impacts were partially offset by pricing actions and G&A leverage. Our diluted EPS in Q3 was $2.79 versus $3.24 in Q3 2021. Breaking down that 45-cent decrease in our diluted EPS, our operating results benefited us by 10 cents. Changes in foreign currency exchange rates negatively impacted us by $0.17. Our higher effective tax rate negatively impacted us by $0.48, $0.36 of which was driven by changes in tax impact of stock-based compensation. Lower net interest expense benefited us by $0.02, and our lower diluted share count driven by share repurchases over the trailing 12 months benefited us by $0.08. Although we faced operating headwinds, we continued to generate sizable free cash flow. During the first 3 quarters of 2022, we generated net cash provided by operating activities of approximately $330 million. After deducting for capital expenditures of approximately $50 million, which consisted of investments in our technology initiatives and investments in our supply chain centers, including our new facility in Indiana, which will begin serving stores next week, we generated free cash flow of approximately $280 million. Free cash flow decreased $154 million from the first three quarters of 2021, primarily due to changes in working capital, the timing of payments for accrued liabilities and receipts on accounts receivable and lower net income. During the quarter, we repurchased and retired approximately 491,000 shares for $196 million at an average price of $399.52 per share. As of the end of Q3, we had approximately $410 million remaining under our current board authorization for share repurchases. During the quarter, we drew down $120 million on our existing variable funding note facility to fund additional return of capital to shareholders through share repurchases. Subsequent to the quarter, we also closed on a new additional $120 million variable funding note facility with terms that are substantially similar to our existing facility and paid down $60 million of the $120 million drawn on the existing facility during the third quarter. We are very pleased with the competitive terms we were able to achieve given the current volatile interest rate environment. In addition, as Russell mentioned, subsequent to the end of the quarter on November 26th, we completed transactions to refranchise all our corporate stores in Arizona and Utah to certain franchisees for approximately $41 million. We will provide further details of the financial impact of the transaction when we report our fourth quarter results next year. Before I close, we would like to update the guidance we previously provided for 2022. Based on the continuously evolving macroeconomic environment, we now expect changes in foreign currency exchange rates to have a negative impact of $29 million-$31 million compared to 2021, an increase from $22 million-$26 million we were expecting to see in July. We now expect capital expenditures to be approximately $100 million for the year, down from the previous guidance of approximately $120 million. We now expect G&A to be $415 million-$420 million, down from the previous guidance of $420 million-$428 million. Thank you all for joining the call today. Now I will turn it back to Russell. Thank you, Sandeep. Before we open the call for questions, I wanted to talk a little bit about the macro environment and the potential impact on the QSR industry, particularly delivery. There are a couple of dynamics that we're watching in the broader restaurant delivery segment. First, as consumers return to some of their pre-COVID eating habits, the sit-down business that was once a source of volume for restaurant delivery over the past few years is rebounding and bringing back with it some of the orders that were delivered when sit-down was constrained. The second dynamic is inflation. We believe that inflation will impact delivery more than carry out due to the added expenses of fees and tips in that channel. Our research shows that a relatively higher delivery cost might lead some customers to prepare meals at home. This could be exacerbated as consumer spending becomes more constrained around the holiday. As we begin Q4, I believe Domino's is poised to emerge from these volatile times stronger than ever. This is what our business model was built for. I joined Domino's in 2008 during another tough economic environment. What I learned then is even more true today now that we're the number one pizza company in the world. In a world where consumer confidence is shrinking and inflation is high, Domino's will succeed because we have strong, profitable franchisees, a team that makes disciplined decisions based on insights, and have the digital supply chain and delivery expertise to offer best-in-class value and customer experience. We delivered around 1/3 of the pizzas in the United States before the pandemic, and we deliver around 1/3 of the pizzas today. One important thing we have today that we didn't have in 2008 is a strong carryout business. As a more complete restaurant company today, I have never been more confident in the future of Domino's Pizza. With that, we'll open the call to questions. As a reminder, to ask a question, you will need to press star one one on your telephone. Once again, that's star one one. Please stand by. We compile the Q&A roster. Our first question comes from the line of Brian Bittner from Oppenheimer. Your line is open. Good morning. Russell, I want to ask about the promotional strategy, and I know you touched on a tougher macro at the end of your prepared remarks. Specifically, you've had the 20% off everything discount in place since around September 6. It's been happening at a time where I think staffing still does remain a headwind, even though it's been improving. I would think franchisees margins are also being pressured by inflation. Can you just help unpack the strategic thinking around this strategy? You know, and it is still in place from what I can see. Is it accomplishing what you initially wanted it to accomplish? Oh, good morning, Brian. Thanks for the question. Yeah, on the 20% off, you know, there were really two strategic reasons why we went ahead and did it. As you said, it's kind of at the end of the quarter. You know, the first is, as a brand, what Domino's tries to do is whenever there's a big tension in society, and obviously now the macro tension is around, you know, inflation, we try to do a brand action that shows that we are the advocates for our customers. In a time where there's inflation, you know, and everything's going up, Domino's being able to offer 20% off was really a more strategic communication move than it was anything else. Secondarily, you know, as I said in my opening remarks, we're about to evolve our carryout offer from $5.99 - $6.99 next week. Part of what 20% off does, it gives us a little bit of room between where we were and where we're going from a communication standpoint. Brian, I'll just add something to that. The 20% off promotion or the Mix & Match promotion from a profitability standpoint is not significantly different. It's just a different way of delivering a promotion to the consumer. From a margin standpoint, our franchisees and our corporate stores have not been really impacted in a significant way to this promotion. We feel really good about that piece of it as well. Thank you. Thank you. One moment for our next question. Our next question is on the line of Peter Saleh from BTIG. Your line is open. Great. Thanks. Russell, I just wanted to come back to those comments you just made. You know, the mention on inflation. You know, we've had double-digit inflation really all year. Yet it seems like the commentary and the rhetoric around the impact on the consumer seems a little bit more, I guess, pronounced right now. Can you just talk about what you're seeing, and maybe what's changed there that makes you feel like, you know, I guess, has the inflation just caught up with the consumer more broadly? Or just what's changed on that side, given that we've had really double-digit inflation for, you know, really three quarters so far this year? Peter, thanks for the question. You know, for us here at Domino's, our approach to whether it's an inflation environment or non-inflation environment is we need to be the best relative value out there in the QSR industry. Interestingly enough, it was exactly what our internal research predicted, when we went from $5.99 - $6.99, we still remained a great relative value on the delivery side. Things have changed, prices, cost inputs have changed. Our research now indicates we can do the same thing on the carry out side and we'll still remain a large relative value. Really that's our role within this inflationary environment, is to be a strong relative value in QSR for our customers. Thank you. Thank you. One moment for next question. Our next question comes from the line of Sara Senatore from Bank of America. Your line is open. Hi. Thank you. A two-part question, if I may. One was just on company margins and how to think about that versus franchisees. You know, labor hours or labor cost was sort of stable. The pressure was stable quarter-over-quarter, even though your comps were a lot better. Is that signaling more wages or more hours in response to driver shortage, and are franchisees seeing something similar? Second, I guess if you were to choose to refranchise the Michigan market to help mitigate the impact on company margins, is the refranchising strategy a headwind to doing that? I know you talked about 70 basis points of comp headwind, which is pretty much unchanged, but just trying to understand the appetite for that. Thanks. Hi, Sarah Senatore. I'll take the first part of the question, and then Russell Weiner will pick up on the second piece on the refranchising opportunity. I think on the company margins or what we saw over there was a multitude of headwinds, definitely the food basket and some investments in labor that we had to make over there. I'm just gonna step back a little bit and talk about total company margins. Number one, the refranchising of these two markets essentially will be margin accretive to total company margins, and it will start showing up in the fourth quarter. I think specifically talking about corporate stores margins, we've talked about this in the previous quarters as well, but from a pricing standpoint, I think we were slightly behind where the franchisees were in taking pricing. I think as the inflationary headwinds have actually built, whether it's the food basket or the investments in labor that we have to make in our stores, that has been a pinch point for company operating margins. As we've talked about, we're evolving even the national offers right now on the carryout side and this benefit will come into the company-operated stores as well as the franchisee stores, obviously. I think with what we've actually done in terms of changes that we've talked about since the last quarter, we're really pleased with the sequential improvement that we saw in same-store sales. It went from - 9% to - 1.9% in between second quarter and the third quarter. That's very encouraging, and this ends up being a leading indicator of where we can take our profitability of the corporate stores going forward. It's not gonna be an overnight fix, but a lot of the actions, including pricing, are already underway. I think it's more a question of time to actually see this play out in terms of total profit margins. Russell, franchising. Sure. Thanks for the question, Sarah. You know, the franchising or refranchising strategy for us is really more, I would think of it as a growth strategy. At Team USA, our corporate store markets are there to unlock growth in two ways, right? Sometimes we're gonna buy a market like we did in Michigan, and there it was to kind of redistribute stores and own some ourselves, and unlock what is a market that we think have a lot of upside? In some cases, the unlocking of growth and the creation of franchisees that are gonna be our future is done through refranchising, and that's what was done, you know, most recently in our markets in Phoenix and Salt Lake City. I would like to spend a few seconds just talking about what it means when we refranchise stores in this particular instance, because really it's what makes Domino's so special. Maybe there are people who are listening to the call now who are interested in drivers positions. Let me tell you why you should be interested, because our drivers become franchisees, right? We sold stores, we refranchised stores to our franchisees in Arizona and Utah. 11 franchisees purchased those. Three of them were first-time franchisees, right? Two of them were former corporate employees. Remember, 95% of our franchisees started out as employees making pizza or driving. Six franchisees purchased the first store they ever worked in. That's part of the American dream, which is Domino's. In this case, we're unlocking growth and new franchisees. Thank you. One moment for our next question. Our next question comes from the line of John Glass from Morgan Stanley. Your line is open. Thanks. Good morning. Can you talk about the outlook for the global unit growth balance of year and maybe into next year? You signaled that U.S. would slow. I think you were seeing that international closures were higher. I'm not certain if this is all just contained in this quarter, but can you sort of talk about how you think about that? If just more generally, are you starting to see some constraints on international development given inflation, given supply chain? Are there any concerns that you might see further deterioration or slowing, I should say, in international store growth ex those closures given changing macro environment? Thanks. John, this is Sandeep. I think on the outlook for global unit growth, we're really bullish. I think our things are looking very strong in terms of where the potential for growth exists. We've talked previously about 10,000 potential stores in our top 15 markets. That hasn't changed in terms of the calculus. Looking at the more specific recent quarter, we've already flagged that in the U.S. between the permitting and construction delays that we're dealing with, we're gonna see a slowdown. The slowdown has come. We saw that as a part of it. I think specifically internationally, we talked about the exit of the Italian market by a master franchisee as a key driver of the decline. I think in Brazil, we had our master franchisee there continuing to optimize the market. There were some stores that closed in the first quarter, and they closed some more stores in the third quarter. I wouldn't really read too much into this in terms of where the long-term international trends are going. It is very strong in terms of potential. I talked in the prepared remarks about the paybacks on our US stores. They're very compelling. They're around three years from more recent years, like 2018 and 2019 seems to be on track as well. I can assure you that the international paybacks are even better. The runway that we've got over there is very strong, and we're very confident of that. Thank you. One moment for our next question. Our next question comes from the line of Brian Mullan from Deutsche Bank. Your line is open. Hey, thank you. Yeah, I think in the prepared marks, you said it was an 8-point gap between the top quintile and the bottom quintile of stores this quarter in delivery, another sequential improvement. My question is, can you give us a sense of what the historical gap between the top and bottom quintile for delivery was prior to COVID? You know, and when you get back to that normal gap, is that an indicator that the driver issue is getting close to solved in your mind? Just talk about that or measuring that internally as you make progress. Brian, thanks for that question. You're right. I mean, the 8-point gap that we're seeing on delivery is higher than we've seen historically, but again, let's just keep in mind, it was 17 points in Q1, it was 11 points in Q2, and now it's 8 points. It is still higher, and there's still a bit more work to be done, but we continue to make progress, as Russell talked about in the prepared remarks. The key over here is we have to restore service to the levels that our customers are accustomed to. We also need to make sure that we're able to fulfill all the demand that comes our way. It's when those things actually happen that we know we've actually returned to where we need to be. I think as far as we're concerned, we continue to look for progress points as we make sequential progress through the year. We're very confident that the answer is probably within the system like we've talked about previously. But I think we're continuing to look at progress points. We'll keep talking about it as we go through the next quarter. Thank you. One moment for our next question. Our next question comes from the line of John Ivankoe from JP Morgan. Your line is open. Hi. Thank you. It's John Ivankoe. The question was on US unit development. I know we talked about the slowdown has come, I think, Sandeep, was it your quote? But looking at the 172 units year-over-year of the 2.7%, is that the bottom, you know, in terms of growth? I mean, how should we be thinking about, you know, the next fourth quarter firstly, but, you know, also the next twelve months in terms of, you know, those levels that you've achieved in the previous twelve months? I mean, is that stable higher or lower from here, I guess is the first question. I just wanted to understand if there's any symbolism in terms of, you know, the modest cutbacks in G&A and the more significant cutbacks in CapEx. Is that more timing oriented or, you know, or are there other changes in the business that are gonna be more lasting? Thank you. Thanks. Thanks, John. Appreciate the questions. Now, I think in terms of the US units, we flagged this back in at the end of the second quarter when we talked about the expected slowdown due to the permitting and construction delays that we were seeing. I think it's expected to impact definitely the balance of the year, as we talked about earlier. Frankly, until we see the permitting and construction delays completely abate, it is going to be a headwind. I think what we do see is, once we get past that headwind, the demand is very strong from our franchisees. We should see that towards to prior norms in terms of growth rates. That's why we're really very convinced that we're on our way to that 8,000+ mark, and I think it's more a question of getting past these macro disruptions that we're seeing over here. I think when it comes to the G&A and CapEx adjustments to guidance, that's. I'll take the G&A one first. Now, the G&A is impacted a little bit by the refranchising of stores that we talked about, right? With some of the corporate stores in Arizona and Utah are now moving into the franchise P&L, the G&A structure that was going with those stores when they were corporate stores wouldn't really hit our G&A, and that's part of the driver of it. There's some other small elements of adjustments in terms of expenses that actually went into that as well. It's not major, it's just more of a reclass between corporate stores and franchise stores. I think on CapEx, if you look at our run rate on CapEx, the $120 million was a bit of a tick up. We expected to have heavier spend on some of our supply chain investments. We're just pretty much sliding it forward, so I don't think it's gonna change the cadence of how much spend we're gonna have. It's just more of a timing impact, sliding forward. Thank you. One moment for our next question. Our next question comes from the line of Gregory Francfort from Guggenheim. Your line is open. Hey. Hey, thanks for the question. Russell, I had a question about just pricing elasticity. I think it's interesting that a lot of your competitors have taken the delivery prices up 25%-30% above their in-store prices. You guys, you know, it's pretty consistent, but you guys I think have a little bit higher delivery fees. Is that because of maybe some work on the elasticity of pricing in the delivery fees versus in the menu? Is there an opportunity to widen out maybe the delivery prices versus the in-store prices over time for Domino's? Thanks. Yeah. Gregory, thanks for the question. As we've said on prior calls, the delivery fees and the menu prices are both franchisee's decision on what to make. What we do there, though, is we provide them with what the competitive context is at a local level. There certainly are recommendations that are based on data on where you need to be versus the competition. All that's taken into account when they set their pricing relative to our national pricing. Thank you. One moment for our next question. Our next question will come from Andrew Strelzik from BMO. Your line is open. Hey. Hey, good morning. I was hoping you could elaborate a little bit on your comments about efficiencies in the cost structure, which is something you'd mentioned in prior quarters as well. Are you continuing to find incremental efficiency opportunities in recent months, or is this more kind of execution of the initiatives you've been talking about? Is there anything at the store level, technology or otherwise, that you're exploring to potentially help from an efficiency perspective? Andrew, thanks for the question. In terms of efficiencies in the cost structure, I think, from the beginning of the year, we've been talking about continuing to look at it. I think it's a combination of, are there costs that actually could be eliminated if they make sense to eliminate? But more importantly, it's resource allocation. How do we redeploy resources for the best returns? I think, in terms of the journey that we're under, it's not really changed that much from what we talked about when I first talked to you, in April. I think we'll continue to do this as we move forward, not just in the fourth quarter, but into 2023 as well. From that standpoint, there's nothing more than that. I think from a technology and supply chain standpoint, if you had a question, Russell may have some comments to add on that. Yeah. I think you're absolutely right on the efficiency standpoint. That's something we've been looking to drive and will continue to look to drive. I think there are really two ways that we're doing it. One is in the physical circle of operations, and bringing in and codifying best practices that we're gonna talk about in a future call. That's part of what I told you I was so excited to see when I was down in Houston. In addition to what we can do with the physical circle of operation, we have a next generation suite of store systems that we've already launched and we're gonna continue to launch that really just tries to automate some of the more manual decision-making and optimize the efficiency and effectiveness of our stores. We're looking at from a human-centered design standpoint and also how can technology help us. One moment for our next question. Our next question comes from the line of Andrew Charles from Cowen. Your line is open. Great. Thank you. Russell, I know you said brand health scores are pre-COVID highs, but I wanna dig in a little bit more just around the evolution and modernization in recent years with things that drove your success in the prior 10 years. You know, menu innovation, loyalty, digital, and advertising. Really my question is, looking beyond Boost Weeks and beyond Q4, what work is being done to advance the ball on these core four parts of the playbook to help you guys grow traffic in 2023, and beyond in a more competitive delivery environment as well as pizza category? Yeah. Andrew, thanks for the question. I mean, you're right. Certainly during the last couple of years, we were adjusting as things kind of came our way. The long-term planning and kind of the stories you're used to seeing from Domino's, maybe took a little bit of a backseat to just trying to adjust to what was going on in the environment. I fully expect, obviously, we can't talk about the future, but what you've seen from us before, which are these, oh, yes, we did stories that are adjusting to what's going on in society, technology, innovation, not only for the customer but in store. From an innovation standpoint, I think we're really unique and we will continue to be unique, in that we just don't launch products for product's sake, we're spending all this money, and then they come out of the market. We launch incremental platforms, and those platforms work really well into our Mix & Match deal. We know when we work them into our Mix & Match deal, it increases items per order, and that's the healthy way to drive ticket. I think you're right on in how you assessed the way we've grown the business, and that's how we're gonna be focused moving forward. Thank you. One moment for our next question. Our next question comes from the line of Chris O'Cull from Stifel. Your line is open. Thanks, guys. This is Patrick on for Chris. My question relates to the supply chain. Am I right in thinking that unit volumes remain down year-over-year along with transactions? If so, you know, what opportunities are there to improve volumes outside of unit and transaction growth in that segment? Would you consider adding new products, or potentially some other alternative that makes strategic sense for the business as a whole? Yeah, Patrick, sorry, thanks for the question. I think specifically on supply chain, if you go and look at the most recent quarter, yes, unit volume was down, just because I think there was a driver that was partial offset to the fact that the market basket pricing was up by 13.4%. But I think overall, when we look at the actual dynamics of what happened in the margin, there were two different things. I think you had fuel and labor costs basically were also a headwind that actually impacted the supply chain margins in the quarter, which sequentially was a change. It was actually a hardening impact compared to the second quarter, and that's why you saw margins shift a little bit downwards in terms of the gap versus the prior. Just a reminder, I think we've said this before, but supply chain margins in an increasing cost environment will contract because we have a constant dollar margin on whatever food product we sell. In the opposite situation where costs decline and food costs decline, we would be seeing improving margins. This is nothing new in terms of our business model and the model that we apply to how we price to the franchisees. We expect to see this headwind for the balance of the year given where we're projecting the food basket to be. Thank you. One moment for our next question. Our next question comes from the line of Lauren Silberman from Credit Suisse. Your line is open. Thanks so much. I wanted to ask about the increase in the two or more Mix & Match for carryout next week. Can you talk about the decision to change the carryout price now versus increasing it in March alongside delivery? Is elasticity lower than expected, so you have more comfort raising it on carryout or any other factors that went into the decision? Thank you. Thanks, Lauren. I think what's really important is really think about the philosophy on how we look at pricing in the company, and it's not new. It's not started this year. It's been happening over the last decade or more. I think there's key elements to it. One is, I think we would look at our input costs and essentially what that does in terms of long-term store profitability for the franchisees and our own corporate stores. Then we also look at the relative consumer price points and competition in the marketplace. When you actually peel back to the decision to adjust the delivery Mix & Match back in March, all of these factors were taken into consideration. I think where we saw that there had been some hardening in costs was on the labor side. Because delivery is a more labor-intensive channel of business, we had visibility to that where the increases tend to be more permanent in nature. To drive the contribution margin that was needed on the delivery side, we believe it was needed to make that adjustment to the Mix & Match price on delivery in March. While food basket had already started going up, what has happened historically is it's been very volatile. It can go up, but it can also reverse. So we wanted to make sure that the increasing costs that we are seeing on the food basket were likely to sustain. Also we've examined over the last six months how competitive pricing has actually evolved in the marketplace. When you take both those elements into consideration, competitive price shift, as well as the fact that the food basket has continued to harden, we believe now is the right time to make the change on the carryout Mix & Match as well to drive that profitability for the franchisees and for ourselves. Thank you. One moment for our next question. Our next question comes from the line of Jared Garber from Goldman Sachs. Your line is open. Hi, thanks for the question. Russell, you made some comments around maybe the shift that you're seeing or potentially will see in the delivery business versus the carryout business as it relates to consumer demand and, you know, some more pressure on the consumer. Can you talk about that dynamic in international markets as well and maybe give us a little bit of a sense of the breakdown on carryout versus delivery there? I know we heard some good color on the U.K. market and, you know, some of the bad impacts there, but certainly the macroeconomic outlook in broader Europe is a little bit more challenged as we go forward. Any color on how we should be thinking about that or how you're thinking about that and what you're hearing and seeing from franchisees would be great. Thanks. Yeah. Yeah, Jared, I think just a couple of points on that before I get into the international markets, which I think was the bulk of where you're talking about the demand change. I think what we talked about in the prepared remarks was specifically on delivery, there could be some pressure due to the macroeconomic environment and inflationary environment. I think overall from a carryout standpoint versus delivery, as we've said in the prepared remarks, there's very little overlap between the two businesses. I think they're two pretty unique businesses. We don't necessarily see a switch out between the two channels. I think overall, when we talk about the impact of inflation, it is not just a domestic impact, it's international as well. The same dynamics that we talked about being a pressure point would be an impact internationally, including the U.K. that we talked about. I think the risk is when you have a very significant inflation, consumers may actually switch to cooking at home and preparing food at home. That's just the risk factor. We are in unprecedented inflationary times. How consumer behavior evolves right now is still a little bit more to be seen, but our testing models show that there's a higher likelihood to switch if inflation remains at these elevated levels. Yeah. I would just add to that, you know, what Sandeep said is when pricing hits on the delivery side, people tend to more go to cook at home. When pricing hits on the carryout side, folks tend to look at relative value, and that's really where we win. A lot of the growth, you know, I mentioned earlier we're the number one carryout pizza brand, at least in the U.S. The fact is we also source a lot of our carryout volume from other QSR. During times globally where pricing is going up on our carryout business, it actually should be a source of volume. Thank you. One moment for our next question. Our next question comes from the line of Dennis Geiger from UBS. Your line is open. Thanks for the question. Sandeep, you spoke to a strong franchisee demand to open new stores in the U.S., particularly as you get past the supply chain and the permitting delays. I'm just wondering if you could speak a little bit more to sort of franchisee health across the U.S. as we think about the cost pressures that the industry's been facing, as well as now sort of higher interest rates. Just sort of where sentiment is now broadly for your franchisees here in the States. Yeah. No, I think when we talk to our franchisees and obviously when we've been through this recent refranchising transaction as well, significant discussions are around potential growth. I think every time we actually have these discussions, we're talking about growth potential. The growth pipeline is very clearly seen by our franchisees and they partner with us very extensively on how to tap into that growth pipeline. This comes from multiple conversations that are happening across the organization. They happen with all of our leadership in the organization, with Russell, of course. I'm really confident because I've seen the level of confidence building since I've come in. When I came in in April, I think things were pretty much at the toughest point that they were. I think every quarter that I've been over here sequentially, I've seen an improving sentiment because solutions are being found. I think collectively we're seeing improvements in performance. I think the latest decision that we've actually taken on the national offer has been very well received by our franchisee system, and we're all excited to drive long-term profitability. I would just add to that. You know, for me, working with Domino's franchisees is the best part of my job. Next week, we have our franchisees coming in. Annually, we have an economic summit, and so this is something we do every year, and I'm looking forward to seeing them again. I thought maybe, as we get towards the end of the conversation, I would tell you a little bit about, what I'm gonna be talking to them, how excited I am at what they're doing. Sandeep talked about sequential improvements. That means, you know, Q3 better than Q2, better than Q1. Same store sales, one year and three year. Q2 is better than Q1, Q3 is better than Q2. Service times, they got better in Q2 than in Q1. They got better in Q3 than in Q2. The gap between the first and fifth quintile is shrinking every quarter. The Boost Week performance, their service time in the second Boost Week was better than their service time in the first Boost Week, and they are all in on future Boost Weeks getting back to how we used to do them prior to the pandemic. They delivered one out of every three pizzas before the pandemic, and they deliver about one out of every three pizzas post. What is new and what they should be congratulated for is we've emerged now as the number one carryout brand. From a total pizza market share standpoint, we're up 200 basis points versus three years ago, and that's just an amazing accomplishment. Maybe one more question. Thank you. We do have one last question. Our last question will come from the line of Alexander Slagle from Jefferies. Your line is open. Hey, thanks. Just a follow-up question on the G&A. As you have ratcheted that down the outlook fairly meaningfully through the year and talked about the refranchising impact. Curious if there's a deeper structural change beyond this that can extend past this year, and is it possible we see G&A spend next year ramping less than typical? Or conversely, are there some timing shifts that might drive more of an increase in 2023? Alex, on this, I think I would just go back to what I said previously on G&A. I think the big driver of it was the refranchising transaction, where the G&A basically shifts out of the corporate stores into the franchisee system. I think in terms of how we would look at it, we've always continued to make investments to fuel growth. We will continue to make investments to fuel growth. The growth algorithm is very much intact for the company. I don't expect to have structural reductions in G&A, but at the same time, we just need to be very thoughtful about where we allocate the resources that we're investing in. That's really more the focus of it than absolute reductions in G&A. Thank you. That's all the time we have for Q&A. I'd like to turn the call back over to Russell for any closing remarks. All right. Well, thanks everyone for joining this morning. We appreciate it. Sandeep and I will look forward to speaking with you in our full year 2022 results. Have a great day and great weekend. This concludes today's conference call. Thank you for participating. You may now disconnect.