Great, we are starting. So I'm Andrew Charles. I'm the restaurant analyst at TD Cowen. Really thrilled today to be joined by Domino's Pizza. From the company, we have CEO Russell Weiner, as well as, CFO Sandeep Reddy. And so, guys, thanks so much for joining me on stage today. Thanks for having us. So maybe we can kick off, you know, on the heels of your analyst day. I'm looking at the screen right now around Hungry for MORE. You know, Russell, you unveiled this plan last month. Maybe you can help just provide the two-minute overview of the key changes the new plan brings, in particular, how the plan intends to drive more U.S. delivery traffic. Yeah, sure. Well, thanks, everyone, for coming. I can't see any of you because I'm blinded by the light, but you've never looked better. So great, great seeing you all. Yeah, when we launched Hungry for MORE, I think it's important for folks here to know Hungry for MORE is not just a tagline, it's essentially a strategy, and it's a moniker for what it is that we're gonna deliver, you know, over the course of the next five years. And that's more sales, more stores, and more profit. On the sales side, we're seeing total retail sales of 7%+. So 7% is the floor, but this team is hungry for more, so we're gonna try to deliver more. You take the low end of that 7%, and you look at it over the next five years. That's $7 billion. And so that's akin to taking the number 10 restaurant in the U.S. and adding that to the size of Domino's today. So that's a big number, and we're doing similar to from a store and profit perspective. So those are what we're gonna deliver. How we're gonna deliver it is through our four Hungry for MORE strategies, right? M is most delicious food. We know we have the most delicious food in the industry, but it's time to talk about it more, it's time to show it more, it's time to come up with new products. Operational excellence, you're only as good and you're only as delicious as your operators can deliver, and we're working on that every day with in-store and with technology. The R stands for renowned value. We're always been known as a value player from a price standpoint, but I want you to think about value in a little bit different way as we go into next year. Actually, we're in next year, as we go into this year, and we're already seeing in the restaurant industry, transactions may be being negative, ticket, yeah, ticket being up. So when we talk about value for Domino's, we go into 2024 with a barbell customer strategy, right? With our existing customers, that may be a little bit more value-oriented, lower income. Well, we've got our $6.99 mix and match. We have our brand-new loyalty program, which I'd love to talk about if we've got time. But then, on the other side, you know, we've got higher-income customers, younger customers, that have access to Domino's for the first time as part of our partnership with Uber. And so that, in a nutshell, is what Hungry for MORE is all about. Awesome. It's a great segue. I want to talk about, you know, lower-income consumer, which has been pressured for the better part of 2023 from elevated inflation, low consumer confidence, and frankly, a bunch of other macro factors that are working against that group. And, you know, I would just echo what you just said, that the work that we've done and the data we've seen suggests that Uber is gonna cater more to that incremental customer who's younger as well as higher income. So can you talk about the plan to provide more value to this low-income group, especially if needed to protect traffic in 2024? Yeah, sure. I think the best answer to that question is to let you know that we're already doing it, right? So Uber certainly is gonna be a place for incremental customers, and we're, our data shows probably 65% of those customers are gonna be incremental. What I was really excited about that we talked about during Investor Day, was before you even bring in Uber, if you look at... You know, we got two businesses. Our carryout business has been on fire, up, you know, double digits over the last two years. But our delivery business, which has been pressured, delivery from a sales perspective and an order perspective, was positive in Q4. And so what that means is before we, and that's before you even bring in Uber. So that means before Uber, with our customer base, which tends to be lower income, we are turning things around. We're turning things around really for a couple of reasons. One is our operations, right? The O in MORE, we are delivering back to levels that we delivered in 2019. Our staffing is as good as it was back in 2019. But what we're also doing is we've got this great loyalty program that's really engaging new customers. So let me talk a little bit about the change in the loyalty program, because we launched our original loyalty program in 2015. What we did was we looked at. We got 30,000,000-32,000,000 customers in our loyalty program, active customers. But we got another 40,000,000+ million that used us and stopped using it. We talked to them, and we talked to other customers who didn't come to Domino's. What did they tend to be? They tended to be lower-frequency customers, and they tended to be carryout customers. We made the program better for those two customers. The minimum order used to be $10 to get points in our program. Our national offer on carryout is $7.99, so all these carryout customers who are value-oriented customers, they weren't getting points. We lowered that to $5. It used to be that you have to buy 6x to get a free pizza. Now you can buy as few as 2x to get a free pizza. Essentially, for this lower-income customer, we've made the brand more accessible. You don't have to buy as much as you used to, and so what that means is more transactions. In a time that they're looking for value, we're delivering more value. Russell, maybe we can expand on that, too. You know, what are the opportunities to become more dynamic with reaching out to these folks that are lapsed? I mean, you, you guys obviously have a ton of data. You know, you're showing the loyalty program that you want to engage more with consumers. Is there a way that you can, you know, if someone's lapsed, "Hey, we haven't seen you in a while, come in for either an extra 10 points in the loyalty program?" You know, what, what are the efforts there to just expand the reach as well on that? Yeah, well, the good news is we're already doing that today. So we have lapsed user programs that are kind of below-the-line programs that I know you don't see because you're not a lapsed user, but if you were, you would see them. We're really excited about this next year with the launch of kind of the new website, is the ability to go even deeper on personalization and to go almost kind of hyper-personal from a personalization standpoint. So yeah, you know, maybe we would... Why, why should we serve you up a $6.99 offer if you don't want it? But maybe you're a vegetarian, why do you need to see a pepperoni pizza? And, and so our ability to drive personalization is also a big part of that, but we're already doing a lot of these programs today. Yeah, and by the way, I got my Emergency Pizza on Saturday for my son, so I [crosstalk] You did?[crosstalk] About that, yeah. Oh, right. Yeah, yeah. Good, good. Maybe just another one on loyalty. You know, what have been the early learnings since you've revamped the program in September? You know, in particular, can you help give us a better understanding to the impact to order counts and ticket to that base of loyalty users, you know, that you were trying to get better connectivity with, since you put in place the program? I think two pieces of information there. One is if you look, you know, our investor meeting was December 7th, so if you look back 12 months, over those 12 months, we gained 2,000,000 new customers to our loyalty program. They may have been lapsed, but they're new customers, some of them to the program. 1,000,000 of them came between September and December with the new program. So it gives you a sense of what the slope looked like when the new program came on. I think that also, that plus the Emergency Pizza, that's why the trajectory of our delivery business changed. We showed, as I said, we talked about having positive sales and positive transactions in Q4, and that was a big part to the new loyalty program. What I'd add is, the benefit from the loyalty program was twofold: one is on the delivery business, and also on the carryout business. So we saw the same trends from a transaction and ticket standpoint on both businesses to the time of Investor Day. Great. You know, talking a bit about just the Emergency Pizza, you know, Russell, you know, there's perhaps some folks in the rooms that looked at the October Emergency Pizza promotion, which I'll let you explain more what that is. But there seems to be some minority of folks that look at this with a glass half empty view, that it, it's a low-margin way to generate traffic. You know, can you help dispel this narrative? Oh, yeah. Well, look, to be honest, I'm a glass half empty person too, so if an idea gets by me, that means it's really, you know, overflowing, kind of the... The way I would describe Emergency Pizza is, you know, people talk to me a lot about innovation, and we talked at Investor Day that we need to scale up the number of new products we do every year, and we're going to do that. But you can be innovative in technology, and you can be innovative in promotions. All Emergency Pizza is, it's a buy one, get one free. But it's actually better than a buy one, get one free, because the get one free is later, and you have to use your free Emergency Pizza within a month. And so guess what? It's most likely going to be an incremental purchase, and you're definitely going to be adding to that pizza, especially if you're a delivery customer. And so this is a, you will, you will see Emergency Pizza again because it's a positive, order count driver because of that repeat, and people add items when they, when they come back. So it's a good one. It's a, it's an innovation for a pro- for a buy one, get one free. Very good. One more question just on the business, then we can talk, we want to talk more about Uber. You mentioned, uh, today, and you mentioned at the investor meeting that US delivery traffic, you know, had turned positive in Q4, ex the Uber partnership for the first time since 2Q 2021. You know, what do you, what do you attribute that to when you look back to it? It's a few things. It's service, where we've got our service back to where it was prior. We talked about that, both delivery times and staffing. It's our loyalty program. I mean, it's not surprising we launched a loyalty program, we're seeing these numbers. And things like Emergency Pizza, just the Hungry for More strategy we may have launched on December 7th, but we started to execute well before that. And you're seeing the results of that in Q4, and I expect you'll see that moving forward as well. Because remember, again, that was before attributing any Uber volume, and most of that, you should know, as I'm sure this is going to be a question you come up with next, is what's going on, you know, with that relationship right now. We're kind of ending the pilot stage right now.= That should be done where, you know, 90%-95%+ of our markets now have Uber. The marketing will be turned on starting kind of at the end of January, and then we'll just continue to increase throughout the year, their marketing and our marketing. So we expect kind of sales from Uber to continue to follow that trajectory, increasing throughout the year, kind of backloaded towards the end. Yes, let's talk more about it. For those not close to the story, you know, Domino's went live about a month ago with multi-country partnership with Uber. That includes the U.S. And so maybe just first, can we get the background of how this came together after years of, choose the verb you guys want to use, I would, I would say avoiding, you know, third-party delivery. So clearly, this was, you know, a good deal for you guys to obviously come to the table on. But curious about the background and, you know, why now, in terms of the timing? Yeah. Well, sure. One thing is everyone in this room needs to know if there's an opportunity that's a good business opportunity for Domino's, this team's going to be looking into it, and if it's the right thing to do, we're going to do it. it. And so the question may be: "Hey, well, why what took you so long?" And, you know, I'm relatively new to the CEO job, you know, one year and a half, going on two years. But I've been with Domino's 15 years, and so I was part of the company during all of those decisions. And what I can tell you is, prior, the reason we were against doing this hopefully makes a lot of sense to you, which is... Well, it will make a lot of sense to you. We're the number one pizza company in the U.S. We're the number one pizza company in the world. Aggregators were just starting off. Their new customers would have been our customers if we worked with them. And we remember, I think you all remember, you probably covered them, what the financials looked like when they first joined or when they first started, and so our feeling was, why give oxygen to that? Now, the pandemic, who knows what would have happened if the pandemic didn't come? Maybe what happened would have happened three years later, maybe it would never have happened, but the pandemic happened, and all of a sudden, everyone was home, and they were ordering delivery. So that's how $5 billion worth of pizza is sold in the United States through that channel. We'd be idiots now not to do it, because we're not building their business. Now, actually, when we look at the numbers, by participating in the aggregator platform, 65% of those customers, which were not billed off our brand, 65% of them are incremental, and so that's just another channel for us. So there's the scope, and then obviously, you know, the deal itself. So it's a different... I'm sorry, one more thing. We're in a different position because if you remember, you know, a while ago, we were talking, coming out of the pandemic, we had some capacity issues. So maybe that would've been a great time to turn on an Uber or another aggregator, but why would you turn them on if you couldn't handle your own volume? Now, that's fixed. So we went from kind of the stages where, why help build them? They got scale, but we don't yet. And now we're ready, and we've, you know, we're leaning in on a time when the business is positive from a transaction standpoint on its own. Very good. Sandeep, feel free to jump in for this one. You know, you guys have talked about 35% overlap between Uber and Domino's digital users, or said differently, you know, this is probably about 65% incrementality. How did you arrive at that estimate? It's talking to other pizza operators, it's a difficult number to triangulate. You know, curious about your methodology. Yeah, I mean, I think we took a look at that data basically on customer transactions and worked with the different aggregator parties, including Uber, and looked at transactions on Uber and the overlap with the transactions on our platform, and we did see that the overlap was relatively limited, in the 35% range. And actually, that drove our quantification of the opportunity on actually getting onto the platform, because you take a $5 billion business that Russell talked about, you take about a third share of that and a 65% incrementality, and that gets to $1 billion. And what we've actually talked about during the investment as well is, over three years, we expect to get to that $1 billion, but it will take getting on all of the different players in the aggregator platforms in the U.S. Okay. And then, Russell, I'm curious about the advertising efforts you mentioned a minute ago that you're putting into this as well. You know, forever, and still to this day, Domino's is very focused on building their own your own digital channel. Certainly, you get the data sharing, you know, from Uber, so that's clearly a positive here. But, you know, curious about what you're looking to do, you know, from an advertising perspective to build awareness of the Uber partnership. Yeah. I can tell you, 0% of our advertising is going to be spent outside of Uber. Right? 0% of our Uber-related advertising. So once someone is within their kind of walled garden, we're going to do everything we can to get that customer because we think we have the best, you know, proposition to deliver to them. But we are not doing anything outside of Uber to drive people to Uber, number one. Now, Uber will probably be doing that- Yep. We have the ability to put the kibosh on anything. So, for example, if I'm just making something up, but if they wanted to give a free pizza away on Super Bowl, we'd say no for two reasons. One is we're busy, but two is we don't want any Domino's customers that are loyal customers to us, we don't want them to have any reason to go there. And so there will be things driving people to Uber, but we have the ability to help control what they are because we want to keep this an incremental proposition for us. Yeah. Russell, I know that, you know, the agreement obviously is under lock and key, but maybe just at a high level, kind of yes or no, am I warm or am I cold? You know, is Uber offering you some new benefits that kick in if you stay exclusive with them for 15 months, for 18 months? I I mean, you guys have obviously talked about your desire to work with other partners. You know, obviously, we know that Uber is exclusive for a year. You guys are non-committal on the timing, of course, around when new partners will come in. But are there benefits that kind of kick in later? What I'm trying to do is help people understand, you know, is this more than just a one-year benefit in sales you're likely to get, you know, from them? Yeah, there is... the important thing to know about the Uber relationship is that, the one year, you know, is kind of the minimum. Right. But at our decision, yay or nay, it can go further into the future. I'm not going to get into the specifics, but I will tell you what that helps us do is quantify what it would take for someone else to have to buy out that exclusivity, right? And that gives us, you know, some bargaining power, you know, as well, even though, as Sandeep said, we're eventually going to be on all platforms. Yep. Okay. And then, you know, what is going to go into that decision, you know, once exclusivity expires the end of 2024, and you're, you have the opportunity to partner with others, you know, other third-party players. You know, what, what's on that checklist? What's in that decision set as you look forward? Well, one is a no-brainer, which is, are the customers going to be incremental? And, you know, we know they are from what Sandeep said, and like, let's say a DoorDash is going to have different customers than an Uber, especially folks within their loyalty program. And actually within the U.S., you know, we know DoorDash is bigger, it's different globally. And we have, you know, the thing about the Uber relationship is, it is a global one. And so really it will come down to what we said before, which is when we have that decision of what to do at the end of this first year, is what do the basics of the deal look like? You know, we know there are incremental customers to be had, but is the deal right for us that it pays to break that exclusivity? Okay. Sandeep, hoping you can check my math for me. At the investment, you called out that third-party deliveries could be about a $1 billion U.S. sales layer for Domino's in the next three years. You know, this reflects the 65% incrementality, so it's more like a $1.5 billion gross, you know, amount of sales, but, you know, a billion of incremental sales coming in. You had $9 billion of system sales in 2023. This should be like an 11% lift, is what you guys are saying, over the next three years, or translates to about 3.5%-4% lift per year or so to same-store sales. You know, is the math right? Are we thinking about this correctly? I think the math's right in terms of system sales, because I think the 3%-3.5% is system sales, because you're going to have new store growth in addition to that. So probably same-store sales is slightly south of that. But I think overall, when you look at total system sales, yes, we are expecting that 11% lift. Excellent. Okay. Maybe stick with the financials for a second. You know, within the Hungry for MORE plan, you know, there's floors for ongoing operating profit growth of 7% or more, excuse me, of sales growth, eight percent or more of operating profit growth. You know, how do you anticipate leveraging expenses, you know, within the ongoing guidance? Yeah, and I think, and I think when you think about our investments in the P&L, I think whether it's in G&A or sometimes in cost of goods sold as well, a lot of the investments are about driving the top line. And I think the whole point over here is we've actually shown that between 2019 and 2023, we'd shifted a lot of our spend towards consumer demand driving expenditures. That's going to continue in 2024. In fact, we're ratcheting it up because we think that there's even more sales upside, which should drive future profit growth and margin expansion over time. Okay. Past 2024. Sure. Then, yeah, let's talk about that for 2024. You know, you did guide to flat EBIT margins amid the outsized U.S. same-store sales growth that you're expecting. You know, what are the investments to 2024 margins that we should be considering, you know, in the context of the outsized U.S. same-store sales this year? Yeah, I think, number one, I think from a same-store sales perspective, we talked about the U.S. being above the 3%+ guidance that we provided, driven by both loyalty as well as the Uber tailwind that we have. And so system sales effectively is above the 7% as a result. So what our expectation is, we get about the normal 8% operating profit growth, but without margin expansion. Why? Because we're making investments specifically in the two areas I talked about: technology, which is going to have an impact on the G&A line, and I think we're going to have some investments in supply chain for capacity, which would go into the cost of sales line. So between those two things, we're going to drive the dollar growth in operating profit, but we're going to have relatively flat margins versus 2023. Okay, very good. Maybe just one more on the financials before we go on to development. You know, Sandeep, just, you know, last year you guys saw about 70 basis points of productivity benefits impacting the supply chain margin. Is that, you know, obviously more investments to come, obviously, as demand is likely to grow with traffic and with net restaurant growth accelerating, et cetera. You know, curious going ahead, was that a one-time exercise, or is that an evolution where there could be future opportunities to see more productivity benefits? Yeah, I think certainly in 2023, the benefits that we got of 70 basis points were associated with certain initiatives that were implemented in 2023. As a principle, we're always looking at things like that. So is there going to be more as we go forward? Potentially, yes. Is it going to be the same magnitude? Hard, hard to say. It really depends on the year and exactly what's coming. But overall, as I talked about 2024 in particular, we don't see a significant amount, and that's why I was talking about the flat margins, but past 2024, we should continue to look at that. Very good. Definitely want to talk on development. You know, we're certainly encouraged by guidance for 5%+, you know, net restaurant growth, with disclosure that roughly half or so of the development's coming from China and India, where the brand is being very well received. How do you plan to achieve this acceleration just relative to the pace of growth in recent years? Yeah, I think the answer is probably twofold over here. I think in the United States, as we talked about, we expected to see an improvement in 2023 relative to 2022, and then a further improvement from in 2024 relative to 2023. So that's part of the equation in terms of what's going to fuel that acceleration. The other part, I think, on the international business, we talked about some idiosyncratic closures that we'd experienced in 2023 that really, hopefully, are mostly behind us as we go into 2024. And those are the two tailwinds in particular that actually help us as we move forward. But I think in terms of the portfolio, where the sales growth is going to... or the unit growth is going to come from, you touched on China, it's a big opportunity. India is a big opportunity, but there's growth beyond that in the developing markets and the emerging markets and international as well. Yeah. Russell, can you touch really fast on concept acquisitions? You know, we've seen in the past, Domino's, some of the master franchisees have acquired smaller concepts, and the beauty for Domino's is that it's the franchisee CapEx, and then you start to get the royalty from those stores. Is that an opportunity looking ahead over the next five years? Like, do you see more for those, or is those truly just one-off? Well, like I said, we're even from a development standpoint- Yeah Or from a Oh, so you're saying like an international, like in Germany when we bought another? Exactly, yeah. Oh, okay. Yeah, I think those are independent decisions by our master franchisees. So we'll... And, you know, about 80% of our business is held by master franchisees who are public companies, and so, you'll know when it's public on that. But, yeah. Very good. The seconds are ticking away. Russell, I can give it to you for a last thought. You can sing Hail to the Victors, if you'd like. No, well, I am going to the game after this. But I will tell you, better odds than that, at least for me, are the future of Domino's. And, I'd probably leave you with this: many of you who maybe don't cover us as much are saying, "Hey, you're in a category that's growing 1%-2%. Why on earth should I think about, you know, buying you?" I can talk to track record and say, you know, since 2015, we're up 9.5 share points, and we've taken from the big three competitors and the regionals and the locals. But what I'd rather do is talk about the future. And, you know, when you think about our business, yeah, we're the number one pizza company in the U.S. We only deliver one out of every three pizzas. You think about the number one burger chain or Mexican chain or coffee chain and how big they are, that's tons of upside for us. Think about our carryout business. We're only one in five carryout. And so we are number one. For us to have the numbers of the number one is such an incredible upside, and one that we've shown in the past we can deliver on. And so I'd probably leave you with that, is we are hungry for more, and there's a lot more on the table for Domino's Pizza. How about a go blue as well? Go blue! Yeah. Well, with that, we will leave it there. Gentlemen, thank you guys so much. Thanks. Thanks. Thanks a lot. Thanks.