Domino's Pizza reports 5.2% same-store sales growth in Q3, driven by innovative strategies and DoorDash rollout, while navigating challenging macro conditions.

OPERATOR - (00:00:00)

Which is key to its long term success. The new flavors of Bread Bites we just launched marked our second innovation of the year and highlights our innovation with Intent approach. Our intent with this innovation was twofold. First, adding two new flavors, Garlic and Cinnamon, brings news to the Bread Bites platform that we launched in 2012. Second, by adding these Bread Bites flavors, we were able to remove the more operationally complex bread twists from our menu. In addition, customers prefer the taste of Bread Bites over twists and love that they can get 32 bread bites for $6.99 as part of our mix and match deal. Another part of our renowned value barbell strategy is tapping into the aggregator marketplace for pizza delivery. Q3 marked the first quarter where we were fully rolled out on DoorDash and we remain encouraged about its long term potential for our business. We continue to expect our sales on DoorDash to grow as awareness and marketing increases and believe this will be a meaningful contributor to our US comps in Q4. And as we move into 2026, I wanted to quickly touch on the progress we continue to make on the upgrades to our e commerce platforms. I'm excited to announce that we are now fully live with our website and mobile web experiences where our goal prior to full launch was to see our conversion equal to or better than our old platform. The new site does just that. It's much quicker, in particular during the checkout process which provides a better user experience. The apps come next and our goal is to have them rolled out by the end of the year. Next is something our entire system is buzzing about. We are bringing all aspects of Hungry for More to life with a completely new brand refresh. It's our first in 13 years. The new campaign makes every aspect of the brand as craveable as what is inside the box. The new look and feel will roll out over the coming months. In all of our marketing, Hungry for More is no longer just a strategy. It has a look, a sound and a heartbeat. Seeing everything come to life this year gives me the confidence that in 2026 and beyond we will be able to achieve our goal of 3% same store sales in the US and continue to take meaningful market share. We have Best in class franchisee economics in QSR Pizza, the largest advertising budget, a supply chain with incredible purchasing power and a rewards program that is bigger than ever. And we're just getting started. As you know, we don't usually do LTOs at Domino's, so everything we have launched over the last two years Aggregator ordering new loyalty platform Stuffed Crust and more is a part of our base and will be part of our growth in the future and we will continue to add new products, technology and renowned value promotions on top of that. This will be how we drive best in class results and long term value creation for our franchisees and shareholders well into the future. I'll now hand the call over to Sandeep.

Sandeep - (00:03:35)

Sandeep, thank you and good morning everyone. Our third quarter financial results continued to be impacted by a challenging macro backdrop, but we drove profit growth that was slightly ahead of our expectations due to our strong sales performance and the timing of investments. Income from operations increased 11.8% in Q3 excluding the impact of foreign currency. This increase was primarily due to higher US franchise royalties and fees and gross margin dollar growth within supply chain excluding the impact of foreign currency. Global retail sales grew 6.3% in the quarter due to positive US and international comps and global net store growth in Q3 retail sales grew by 7% in the US driven by same store sales and net store growth. This growth was slightly ahead of our expectations due to the strong performance from our Best deal Ever promotion. We also paced well ahead of the QSR pizza category which has grown over the last quarter to approximately 1% year to date. Same store sales accelerated to 5.2% for the quarter on the strength of our Best Deal Ever promotion and Parmesan stuffed crust which drove positive transaction counts. Average ticket benefited from 1.3% of pricing and stuffed crust which carries a higher price point. This was partially offset by a slight decline in our mix due to a higher carryout business that has a lower ticket than delivery. Our carryout comps were up 8.7% due to the previously noted initiatives as well as continued growth from our loyalty program. Delivery was positive 2.5% primarily driven by the strength of our Best Deal Ever promotion and Stuffed Crust. It also benefited from aggregators coming from the launch of DoorDash. Shifting to US unit count, we added 29 net new stores bringing our US system store count to 7090. International retail sales grew 5.7% excluding the impact of foreign currency in the quarter. This was driven by net store growth of 185 and same store sales of 1.7% that met our expectation in the quarter. We continued to see strength in Asia which was primarily due to strong comps in India. We have not seen any material impacts to date from global macro or geopolitical uncertainty. I wanted to highlight the refinancing transaction that we completed in the third quarter. We had two tranches of debt totaling approximately $1.15 billion with a blended interest rate of approximately 4.3% that was due in October of this year. We paid down approximately $150 million of this and refinanced $1 billion in in two $500 million tranches at a blended rate of approximately 5.1%. We were very pleased with the outcome of this transaction. We expect it to have an immaterial impact on our interest expense in 2025 and in 2026 and beyond. As a reminder, our next 2 tranches of debt come due in July 2027 and total approximately $1.3 billion. Moving to capital allocation, we repurchased approximately 166,000 shares at an average price of $450 per share for a total of $75 million in the third quarter. At the end of Q3, we had approximately $540 million remaining on our share repurchase authorization. Now turning to our outlook for 2025, we continue to believe that global retail sales growth should be generally in line with 2024. As part of that, we expect the following first, we continue to expect our U.S. comp for the year to be 3% and to grow our market share meaningfully in QSR Pizza. Our comp could be pressured by the macro environment in the US which we have seen intensify across the restaurant industry at the start of our fourth quarter. Second, we continue to expect our international same store sales growth to be 1 to 2%. This could tilt towards the high end of the range if we do not see any material impacts from macro and geopolitical uncertainty for the balance of the year. Third, our pipeline remains strong in the U.S. where we continue to expect 175/net stores and internationally net store growth to be in line with what we had in 2024. We continue to expect operating income growth of approximately 8% excluding the impact of foreign currency severance expenses related to the organization realignment we previously announced in Q1 and the refranchising gain in Q2. Thank you. We will now open the line for questions.

OPERATOR - (00:09:20)

Thank you. As a reminder to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q and A roster. Our first question comes from Dennis Geiger with UBS. Your line is open. Thanks team, appreciate it. I wanted to ask a little bit more about the US Sales outlook. Same store sales outlook for the year the reiterated 2025 guidance for 3%. You talked about the difficult macro there. Could you just kind of break down maybe anything on what you're seeing at a high level thus far, sort of unpacking that macro dynamic and the impact on the business and then just the confidence in that number given some of the initiatives that seem to be resonating across the promotional activity and some of the other level levers. Thank you very much.

Dennis Geiger - Equity Analyst - (00:10:18)

Morning, Dennis. Thanks for the question. Yeah, no, I think as we said in the prepared remarks, we're reiterating our 3% outlook for same store sales in the US and I think as far as we're concerned, we've been talking about the macro environment being a key factor all year. So this is not new. But I think what we did want to point out was we've definitely been seeing a slowing across restaurant industry sales to start our fourth quarter and that's just a factor that's out there. But as far as we're concerned, we are expecting to continue to gain share against the QSR pizza industry. We've done so really well so far this year and we expect to continue to do that in Q4. So in terms of initiatives, we actually are running Best Deal Ever. As you know. Right now we're excited about DoorDash and the continuing impact of DoorDash as we called out from the beginning of the year to be more of a backup impact. So it should continue into Q4 and we'll have a whole bunch of stuff going on from the renowned value perspective as we move forward. So we just want to make sure that we do all the things that we need to do in terms of initiatives and drive them. And we're excited about our business, but I think we just wanted to point out that we're observing what's happening in the macro environment.

Russell - (00:11:36)

And Dennis, morning. It's Russell. I would just say in this kind of environment, what I'm very confident that we'll continue to do is drive market share. And what that does is it really puts distance between us and our competition. It puts pressure on the economics of their stores. So even some short term restaurant headwinds leads to share gains and long term gains for Domino's in that environment. Thank you. And our next question comes from the line of David Palmer with Evercore isi. Your line is open. Thanks Russell. I was just hoping maybe you can make a comment about the overall delivery market and what you're seeing not just from a consumer standpoint but competitively. It looks like from where we're sitting, like there is A lot of maybe desperate discounting promotional activity on the third party sites right now. Effectively it's, it's the industry's version of stuffing the channel. Late in the quarter you saw a lot of this activity and we're seeing these deals pop up on our app. So could you speak to the broader ecosystem of delivery right now and what's happening there and how you see this playing out? Is this sustainable? What does it mean for you? And maybe the pizza category. Thanks. Yeah. David, good morning. You know, I think, you know, if you take a look, if you take a step back, that's part of why we're happy that our, both our delivery business and our carryout business was up for the quarter. There are, there are a lot of pressures out there, but the fact that we're able to sustain that, and I'll maybe use your words in a second, sustain that profitably is really important. I think we got to look back at the notes. I think he used desperate pricing or something like that. I'll compare that to our renowned value. You know, this is value that we put out there that absolutely is aggressive and is aggressive. You know, certainly if you're a competitor of ours with different store level economics, different ability to drive volume, different ability to bring food costs down to a manageable amount, but the value we have out there is value we can sustain. So yeah, I think whereas we've got a lot of growth in carryout and continued growth in delivery, as more and more people come into delivery, they're having to buy their way into it. And I think in that kind of marketplace we succeed, we excel.

David Palmer - Equity Analyst - (00:14:19)

And Dave, I'm going to add another thing on this because we talked about this from the get go on the aggregator channel, but we are pricing for profitability of the franchisees. So no matter what's going on in the delivery channel, we've actually been able to optimize that and we'll continue to optimize that as we learn more and move along. And more importantly, I think just to put context behind what's going on in the delivery business in a challenged environment, to put up the comps that we did, plus the new stores that we've opened, we're talking about close to mid single digits retail sales growth on the delivery channel in a very tough environment. So we feel really good about our delivery business. We understand what's going on in the landscape, but we have the best franchisee economics and we have the best ability to price for profitability in the industry. So we feel confident that we're doing the right things.

Dave - (00:15:14)

We get excited about delivery here at Domino's Pizza. I'd say one addition to that is this is why I'm so bullish about our long term prospects on aggregators. We deliver like one in every three pizzas out there. We're not at that share yet on aggregators and I think a lot of that is because, well one, we just got on doordash, but we're still growing and there is pricing that in some places for the competition is probably not sustainable. And over time that's what's going to enable us to grow to our fair share. And that's why I think aggregators are a multi year tailwind for us. Thank you. Our next question comes from Brian Bittner with Oppenheimer. Your line is open. Thanks. Good morning. As it relates to your Best Deal Ever promotion, obviously it's part of your renowned value strategy and it's proven to be successful. And I think the main question that we get from the investment community is how do you ensure that you aren't training the consumer to rely on that price point or that deal for times when you aren't running it, considering it is the best deal ever? And a follow up to that is just, can you talk about the economics of this for franchisees? I mean, clearly we can see your company on margins. It didn't have a big impact on cogs margins. So just curious if there's any other tidbits you can add on the economics of Best Deal Ever. Yeah, sure, Brian, I'll take economics first and then we'll go into Best Deal ever. I mean, the best thing I can tell you about the economics is we're on with Best Deal Ever longer than we originally intended because our franchisees called us and told us that they want to continue to lean in because this is driving business in their stores and it's driving profitable business. And so I think that even beyond numbers speaks to what it's doing in our stores. And then when you think of Best Deal Ever, this is just part of what we've got in our arsenal. Both on renowned value, we've got that, we've got boost weeks, we've got emergency pizza, carry out tips. All of these things we come up with new every year as a way to kind of reinvent value, but in a way that's really ownable. And then what we'll do is we'll continue to mix this, the renowned value with the most delicious food aspects. And so you're seeing that actually play out right now on air with the launch of the new product going on at same as Best Deal Ever. The other thing that's really interesting about Best deal Ever, yeah, it is a great price point. But the amazing thing is when you talk to consumers, when they're able to build any pizza they want to build, they come and their takeaway is not only that it's a good price, but they actually think that the food tastes even better. And so this is not just a value driven promotion, it's a most delicious food promotion. And we'll continue to weigh that with all the other strong things that we've got on our calendar in our arsenal for the future. Thank you. And our next question comes from the line of David Tarantino with Baird. Your line is open. Hi, good morning, Russell. I think you mentioned in your prepared remarks your confidence in delivering 3% comps in 2026 and beyond. And a common narrative on on Domino's is that this year had a lot of sales drivers that are going to be tough to lap. So I just wanted to ask you to maybe explain your thought process on how the next few years could evolve and why you're so confident that 3% is the right number going forward. Thanks. Yeah, thanks a lot for the question. I think some of the reason for the question is maybe we run our business a little bit different than other restaurants. This is not a company that does a lot of limited time offers. And so when we launch a product, we launch it because we know it's good enough to stay on the menu and we know it can build over time, and that's for menu items and value items. An example is our loyalty program. We launched our loyalty program in 23. It was bigger in 24 than it was in 23, and it'll be bigger in 25 than it'll be in 24. And David, I think that's the approach to some of these other ones. I just talked earlier about aggregators and how over time we're going to get to our fair share, but we're not there yet. It's not like we've launched and hit our maximum for aggregators, for stuff, crust for loyalty for any of these things. What happens is they become part of our base for our future, where we continue to come back to them and grow, then add things on top of that. If this was an LTO business, then I think people would need to worry because you're launching something and you're taking away and you got to build on it. This is part of our base and part of our growth moving Forward. Thank you. Our next question comes from Gregory Frankhort with Guggenheim. Your line is open. Hey, thanks for the question, Russell. I just wanted to ask, maybe going back to Best deal ever, the $999 price point is a couple bucks higher than some of your existing value programs. And how did customers use 999 versus the other two major platforms? And is there a possibility that you would maybe more permanently shift the customer up a couple bucks, but give them more and maybe make that a more permanent piece of the menu? Thanks. Yeah, Greg, you know, like, when I explain what we're doing with Best Deal Ever, sometimes my simple explanation, it's like opening up an ice cream store. If depending on your preference, your first flavor is probably either going to be chocolate or vanilla, and then the other one's going to come in and then maybe a strawberry. You're not going to do a vanilla and then a French vanilla as your second flavor. And that's kind of what we're doing with our deals right now. The mix and match at 6.99, those are medium. Pizzas and other items are available on the menu. Sandwiches, pasta, salads, all those types of things. The large customers is like that chocolate ice cream added to the vanilla. We're going after somebody else. We're going after someone who may not want all that food, could be a smaller eating occasion, and is willing to pay a little bit more for what they want. I think this is a really important point, and maybe we can address that later as well. I think one of the reasons Domino's we had the quarter we had is. Yeah. Sandeep talked about their pressures right out there in QSRs today. And one of them is economic, but I think the other is what is being offered and not being offered by restaurants out there. I think consumers are looking at deals and saying, well, this is a deal you want to give me. This is not the deal I want. And with Best Deal Ever, we're giving them the deal they want because they can, you know, they can create any pizza they want. So these two deals, mix and match and Best Deal Ever work complementary to each other, which is, I think, why we got the quarter that we got. Thank you. Our next question comes from Danilo Gargiulo with Bernstein. Your line is open. Great. Thank you. Russell, very quick clarification and then a question. So the clarification is you mentioned that you have not reached the maximum among some of the innovations that you have launched. And so I was wondering if you have already reached the same 15% sales mix on the Stopgraft pizza, given that, you know, it has been out for almost six months now, and if not, are you planning to do any tweaks to the go to market or product to be able to reach that 15%? And then the real question is, you were talking about sharp value, right? And renowned value. And we've seen some peers being fairly successful in launching the 6 inch personal pizza that are very sharp price points, capturing individual consumers, growing lunch day parts and whatnot. So this is one aspect that is still not available on your menu. So is there a strategic rationale like your real estate margin, sustainability and whatnot that could or that has prevented Domino's from launching it? Thank you. Yeah, thanks a lot, Danilo. We had really high expectations for stuffed crust, both from a mix bringing in consumers, new consumers, and also operationally from our franchisees. And those high expectations were met both during launch and since then. I've got actually a fun statistic I'll throw out. It'll be interesting to see what projections are on this one. But if you, if we, if to give you a sense of how much stuff crust we sold is, if you, if you took all the cheeses that are in the stuffed crust, that string cheese, and you lined them up next to each other, you would wrap around the earth and still have a lot left over. So we'll see what that means. That model is. I'm not going to tell you it's 15% that you asked or not, but I'll tell you, we were really happy with this launch. We're absolutely going to come back and talk to it in the future. As far as renowned value and the individual pizzas, we've got a lot of items right now that are for individuals that are on our mix and match. We've got sandwiches and pastas and salads and chicken and all those pieces. When we decide what we promote, Danilo, we make decisions based on the numbers and what it's going to deliver. And these smaller kind of lunch, single person, they are opportunities. But the opportunities we have that we put our money behind, at least right now, are much bigger than that we think. And that's why you're seeing some of the results that you're seeing in our business. So we've got the options there, but we're putting more of our money. We're kind of pouring gas on the fire where it's burning. Thank you. And our next question comes from the line of John Ivanka with JP Morgan. Your line is open. Hi. Thank you. Obviously, there's A lot of pushes and pulls in terms of franchise economics and your underlying return on investment for the aggregate units in the US are obviously quite strong. But my question is really around US unit development over the next several years. Years ending the quarter at around 7100 units. I think 7700 is the target in fiscal 28. Remind me on that. And 8500 in the TAM. So how are you thinking? I guess firstly about that 8500, when can we get there? And maybe in terms of thinking about more near term visibility, do we expect linear growth in 26, 27, 28 if there's an early indication about the pace of US unit development given what you're seeing on a trade area by trade area basis. Thank you.

Brian Bittner - Equity Analyst - (00:26:45)

Hi John, it's Sandeep. So look, I think on the franchisee economics side, as you pointed out, our economics are very compelling and I think the appetite from franchisees continues to be very strong, which is why the pipeline visibility this year frankly is a little bit better than last year at the same time and we're very confident in the 175 stores we're talking about for this year. And, and really the algorithm was based on 175 plus a year through 2028. And we see a good line of visibility based on the economics that we are generating and the white space opportunities that we see, whether they're split stores or whether they're greenfield stores, to see that we have good line of visibility to the 7700ish number on 2028 in terms of the 8500. I'll go back to something that Russell said during the investor day, which is we've had long term targets multiple times over the years but somehow they start getting bigger and bigger over time.

Gregory Frankhort - Equity Analyst - (00:27:44)

Why?

Sandeep - (00:27:45)

Because what we take into consideration when we're coming up with those long term markets is the current competitive environment. What has been happening consistently over the past decade is we've been taking share consistently competitive stores are closing, we are opening up stores and actually that opens up even more opportunity for us to open up even more stores around what the stores were opening us. So that 8500 is a perspective based on where we were in 2023. Two years on, you know what's been happening, we've gained a couple of points a share number of competitive stores have closed. That is expected to continue happening over the remaining few years of the Hungry for More time frame of 2028 and probably beyond. And so that's how we look at the full potential number of stores and I think it evolves over time and we feel very bullish about it.

Russell - (00:28:38)

Yeah, that builds sandeep on what I was talking about before is even at a time where maybe restaurant traffic is pressured, that's actually good for Domino's. One is we know we can provide value to our customers when other folks can't, but we think we're going to emerge from that stronger and probably our competitors weaker, which is why that opens up. This is a long term game for us and we get excited about that. I think I'll add, just to add to John's question, what makes me excited about our builds this year is we broaden our builder base and so we've got a lot of smaller franchisees who are now adding to that base. So we have more people than we did, you know, prior years building stores. Which just talks about not only the health of our business, kind of broad based, but our ability to handle when you got more people opening, it's easier to hit those store numbers. Thank you. And our next question comes from the line of Lauren Silverman with Deutsche Bank. Your line is open. Thank you very much. I have a two part question just starting on the consumer environment. You guys have been calling out the macro challenges at the consumer since the back half of 24, which we've seen throughout the industry. It sounds like it's incrementally worse. What do you think is driving that weakness more recently in restaurants just broadly? And then the follow on to that is just how level set 4Q expectations. If the macro remains as challenging as you've seen to start the quarter is 4Q coming in below a 3% comp. Just trying to understand how significant the macro decel is.

Lauren Silverman - Equity Analyst - (00:30:29)

Yeah. So I think your question's really good, Lauren, and I think you're keyed in on what we've been talking about. That really speaking. We saw the macro get really tough starting around the back half of last year in 2024, starting really in Q3. And I think as we kind of came out of 24 and built our expectations for 25, our base expectations were going to be tough macro. And that's why we've been talking about the tough macro as something we've been paying attention to all along. And so far this year the macro really has paced as we expected it to in the first three quarters. What we really pointing out to is in the fourth quarter we started seeing a slowing across the restaurant industry broadly relative to where Q3 was. And we're pointing it out. And look, I mean if it intensifies even further, knowing that we're up against a tough macro environment last year that could put pressure on our full year, same store sales number. So that's being realistic about it. But what we have is a slate of initiatives where we can control our destiny with those initiatives. But the macro, if it gets incrementally worse, could be a pressure.

Sandeep - (00:31:45)

And I just add to that kind of repeating what I said before, maybe in a different way is that short term category pressure leads to long term opportunity for us and short term share growth. So thanks Lauren. Thank you. Our next question comes from Peter Sullit with btig. Your line is open. Great. Thanks for taking the question. Maybe I just wanted to ask a big picture on the pizza category. I think the pizza category was you guys were commenting that it was about flat for the first half of the year and now seems to be up 1% before maybe weakening a little bit or the entire industry weakening in the fourth quarter.

Peter Sullit - Equity Analyst - (00:32:29)

I was hoping you'd give us a.

Pete - (00:32:31)

Little bit more color maybe in the third quarter. That acceleration, what you're seeing by maybe income cohorts, geographies, dayparts, just trying to understand maybe what changed or kind of where the acceleration is coming from in 3Q. Yeah, the income cohort pressure on the lower income customers had been seen kind of throughout restaurants. What I think speaks to the kind of renowned value we have out there is we actually were up amongst all income groups for the quarter and that's our second quarter in a row where we're up against the lower income customers. So no matter what pressure is out there, we seem to be breaking the trend.

Chris o' Cool - Equity Analyst - (00:33:18)

And Pete, what I'll add is you rightly pointed out that we're now at 1% year to date and there was an acceleration in the category a little bit compared to the first half of the year. And really this gets us very close to our 1 to 2% historical growth rate. So the pizza category is continuing to grow kind of in the range of what we expected when we set out the Hungry for More algorithm. And our plans are constructed around that. So I think that was an important point to make because a lot of some of the questions I was getting was is the pizza category declining? And it's not true. I mean it's up slightly up 1%, which is close to our history.

Patrick - (00:33:58)

Thank you. Our next question comes from Chris o' Cool with Stifel. Your line is open. Great. Thanks guys. It's Patrick on for Chris. My question was on carryout. I mean you had a nice Sequential pickup in the comp. The two year stack was really healthy this quarter. I was curious if you were able to just disagree, aggregate where that growth was coming from and how much is higher frequency versus new customer acquisition. But additionally, I know historically you said that there hasn't really been much crossover between carryout and delivery. And just given some of the broader softness in the environment, especially that you're seeing in the beginning of the fourth quarter, I mean, is there any evidence that some delivery customers, maybe even on the lower end of the income spectrum for that channel, may be increasingly opting for carryout?

Andrew Charles - Equity Analyst - (00:34:44)

Yeah. So I think look, on the carryout business, we're just really excited about where the momentum is taking our business. And we even talked about it on the last call when we had a, I think five, eight, if my memory serves me right, on same store sales and now we have an 8, 7. Fantastic. But the drivers of carryout were everything that we talked about in the prepared remarks. Best deal ever was a huge factor. Parmesan stuff crust is a huge factor. The compounding impact from the loyalty program that we talked about in the last call continues to be a factor. Russell just talked about the fact that our loyalty database continues to build upon itself. That's the compounding impact that you're seeing so clearly on the carryout business. And look, we always look at that crossover between carryout and delivery and we really haven't seen a shift on that crossover somewhere in the mid teens. And so I think as far as we're concerned, we're getting off an incremental customer for the most part and building their frequency behind all the initiatives that we have.

Sandeep - (00:35:45)

Yeah, and that carryout number is more of a share growth within carryout than it is taking folks from delivery to carryout. I think also Sandeep talked about our initiatives, but you'll remember, for example, when we talked about the relaunch of loyalty, there was a, there was intent, there was purpose behind that. We redid the program because the original program that was launched in 2015 was more of a delivery program, was more of a program for delivery customers who were high frequency customers, higher ticket customers. And so a lot of the growth we're seeing is because of the changes we made in the loyalty program as well as Bestia lever and stuff crust. Thank you. Our next question comes from Andrew Charles with TD Cowan. Your line is open. Great, thank you. I was wondering if you could help us understand your confidence in the compounding impact of aggregators in 2026. As it's unclear in the 2.5% delivery, same store sales this quarter that you're seeing second year of growth within Uber sales. Yeah, the Uber sales are absolutely within our expectations. We're, we're now fully on with DoorDash in Q3 and so we're just getting started Q4 into 2026. We expect aggregators to continue to grow. I see no reason, Andrew, why if we are one out of every three pizza deliveries off aggregators, why we can't be that on? Because what works on these platforms is what works on off the platforms, which is, you know, scale, you know, price and kind of delivery times and location. We own, you know, the delivery experience there. So we've got a lot of confidence and a lot of room to grow over the last, over the next couple years. Also makes you realize that a lot of what you saw, at least in this quarter with the positive delivery number, while certainly aggregators were a piece of it, the two biggest things were kind of, I hate using the word self help, but call it self inspired initiatives in best deal ever and stuff crust. So I love the health at which we grew our delivery business this quarter.

Christine Cho - Equity Analyst - (00:37:57)

And Andrew, I'm just going to point out something that we've talked about previously. To Russell's point, Uber is tracking where we expected it to and we're very happy with that. But if you look at the cadence with which Uber built last year, it took time. It kind of steadily built over the course of the year. And this is the first quarter, first full quarter that we've been on doordash. So it's going to slowly build over time and I think that's why we expect that compounding impact to move all the way through 2026. And we're going to have even more time on Uber by that time. In addition to DoorDash getting to a point where it's fully annualized as well. So we feel really good about the aggregator business and we really want to manage the delivery business as one whole. Understanding that there's going to be 1P and 3P dynamics.

Russell - (00:38:39)

Yeah. And Andrew, back to the question from earlier. You know, we're not going to, we're going to price competitively, but we're not going to be irrational in pricing. And so we're going to grow at a, at a, at a steady rate on this channel. And, and I think I know to compete here in the long term in a sustainable way, you have to offer discounts that you can sustain and we can absolutely do that. Thank you. Our next question comes from Christine Cho. With Goldman Sachs. Your line is open. Thank you for taking my question. Really excited to hear about your first brand refresh in 13 years. Could you walk us through some of your major considerations here? What specifically triggered the decision that now is the right time? And are you able to share any additional color related to timeline, required investments, and how it will be split between you and your franchisees? Thank you. Yeah, Christine, thanks. You know, the last time we did the brand refresh, 13 years ago, I was the chief Marketing officer. And I can just say I'm jealous at what Kate Trumbull and the team have done with this brand refresh. They've just really taken it to the next level. And it's really, it was kind of inspired by our Hungry for More strategy. And what we saw that we were doing really well, which is driving Renowned Value, the R and Hungry for More. And what we saw that we had a little bit more opportunity to do, which is to drive perceptions, not actual, but perceptions around our deliciousness. And so what you'll see that the team did is kind of reinvent ourselves with our color palette, food photography that we've just never had before, and doing everything we can to drive deliciousness. The research that we have shows us that there is not a brand out there in restaurants that does both deliciousness and value very well. And we know that if we can do that, we're in territory all by ourselves. And then just at the end of the day when you realize that the middle of your name Domino's has mmm in it, you also realize you hit the jackpot. This is really a culmination of Hungry for More, which was a strategy coming to life in something that consumers can hear, can see and taste every day. Thank you. Our next question comes from Brian harbor with Morgan Stanley. Your line is now open. Hey. Morning, guys. Maybe just your comments about some of the pressures picking up more recently, last four or six weeks or whatever. Is there any texture you'd add to that as you look at your own business? Whether it's certain customer groups, Any differences, delivery versus carryout or third party delivery? Could you expand on that a bit?

Brian harbor - (00:41:41)

Yeah. So, Brian, I think, look, the comments that we made about what we'd seen across the restaurant industry were really broad and intended to be what we're seeing from a macro perspective and certainly a sequential slowing. I think we typically don't talk about current quarter trends and we're not going to do that on the call over here, but we're just pointing out that there has been an intensifying of the macro environment. And that's just a factor that's out there that we got to keep monitoring. Our initiatives won't change. They're going to be what they were planned to be, but that's pretty much where we are.

Russell - (00:42:18)

And I realize I didn't answer the second part of Christine's question from before on how the costs are split. All of the rollout for the new campaign is funded by our national advertising fund, which is a 6% fee that our franchisees pay in. So it's fully funded by them. Thank you. Our next question comes from Alex Sligle with Jeffries. Your line is open. Thanks. Good morning. Question on your expectations for the balance between the carryout growth you're seeing, the delivery growth, and then also between traffic and check and just how has this played out relative to your expectations and whether you see this balancing out a bit more as you head into 4Q or 26?

Alex Sligle - Equity Analyst - (00:43:11)

Yeah, Alex, I think we've talked about this from the beginning of the year and this is the year that we expect to see balanced comp growth between ticket as well as order count. Clearly we're doing things like Bestie Lever in addition to aggregators that actually are beneficial to auto count, we're doing things like Parmesan stuff crust, which are beneficial to ticket with a higher price point. So there's a good balance that's out there. And I think in terms of delivery and carry out, we expect to be growing both. But the key over here is we're not going to show our cards on exactly how much we're going to grow on each because some of the initiatives may be slotted to one channel versus the other and we don't want to tip our hand to our competitors. But overall, it's going to be a whole very balanced approach to how we think this through over time, whether it's in Q4 or beyond into 2020.

Andrew Strelczyk - Equity Analyst - (00:44:03)

Thank you. Our next question comes from Sarah Senatori with Bank of America. Your line is open. Hi, good morning. Thanks for the question. Isaiah Austin on for Sarah. Just wanted to ask a quick question around doordash. I know it's only been one full quarter, but when you're looking at incrementality, is that still around that 50% range that you know, you were anticipating previously? And do you see any real distinction so far between the dash and the UberEats customer and that'll do it? Yeah, we're, we're, we're obviously it's early in the game and we still feel pretty confident on the 50% incrementality number. You know, there's, there's the differences that we're seeing are ones that we expected going in Uber. Uber tends to be a little bit more urban doordash, a little bit more rural and a little higher income on Uber than doordash. But obviously doordash is bigger than Uber, so we'd expect more volume to come through that channel over time. Thank you. Our next question comes from Jeff Bernstein with Barclays. Your line is open. Great, thank you very much.

Isaiah Austin - (00:45:18)

Just a question.

Jeff Bernstein - (00:45:19)

Looking outside the US as we close 2025 here, just wondering if you have any initial thoughts that you can share in your confidence in re accelerating that international unit growth. I think in 24 and now in 25 you're talking about maybe 615 units net, which is just sub 4% growth. I know that's below your long term 975 net annually. And I think DPE is seemingly the greatest headwind. So any early color as we, we assume new unit growth, visibility probably better than comp. So assume there's some at least idea as to where that direction could go next year versus this year. Thank you. Maybe I'll start off macro and then sandeep, feel free to add. I mean, yeah, you're certainly right. We are working with DPE right now to drive sales, particularly in France and Japan, but you know, throughout their markets because that drives profitability and you know, sales and profitability beget store growth. And so as that continues to go and as they continue to get more confident, we'll have some more visibility into their growth. But I think through all of this, what I want to make sure I point out is that the two markets that we think are going to be the majority contributors to our store growth moving forward, Japan, and I'm sorry, China and India are just doing amazing. I mean China last year, 240 stores, they talk about being on target for 300 this year. And so the place that we expect a lot of our future growth right now is strong.

Todd Brooks - Equity Analyst - (00:46:55)

Yeah. And I'll just probably add a couple of points to that. I think Russell just mentioned China. I think India's got a different fiscal calendar, but it's about 250 stores is what they're expecting for their fiscal calendar. But if you think about what's really happened in 25, we really have been pressured by DPE store closures, which are around 200 stores that closed in the first quarter. And I think what we're saying is from what we've understood from DPE to this point, most of the store closure should be behind us, assuming that we don't have any further deceleration in same store sales trends. But I think on a going forward basis, we need to make sure that we have good visibility to the potential paybacks from new store openings to really understand what the flex on that is going to be for dpe. And they're working on it. But I think overall we feel that everything outside of DPE is tracking the plans. And so both in 25 as well as in 26, and that continues to be our expectation.

Zach Fatem - (00:48:02)

Thank you. Our next question comes from Andrew Strelczyk with BMO Capital Markets. Your line is open.

Russell - (00:48:12)

Hey, good morning.

A - (00:48:12)

Thanks for taking the question. I wanted to ask about the brand refresh and in particular there was a comment in the announcement about defining how Domino's launches Boulder menu innovation. So, you know, the question is, are you thinking about innovation opportunities differently moving forward and how are you thinking about the brand refresh amplifying the impact of innovation moving forward? Thanks. Yeah, no, thanks. That's a great question. You know, one of the things that we had been stressing since with the original relaunch in 2013 was the diversity of all of our menu items. Right. We launched Mix and Match and we had all these things that you could get for what started at 5.99 and became 699. And we became very retail oriented in the price points and frankly, the product, it was just a kind of little, a lot of show and tell. Here's what we have for $6.99, it was kind of, kind of flat. And what you'll see now, and I think you're seeing this with the bread bites launch is a real focus on the deliciousness of the food of the food that we're talking about. People know a little bit more about our menu. We have a new redesigned website now that helps them explore it a lot better. And so the best thing to drive them to buy Domino's in addition to renowned value, is just delicious product. And so the new campaign really focuses on just that. Thank you. Our next question comes from Todd Brooks with the Benchmark company. Your line is open. Hey, good morning. Thanks for my question on Best deal Ever. Russell, you talked about how the franchisees were so pleased that they looked to extend the program. And that was granted that it's been a successful driver of share within the category. And then you and Sandeep have both outlined a tough macro. I just wanted to ask as you look to Q4 and other initiatives that have been planned the ability to overlay this type of value that's resonating with a consumer. And what's going to be a tougher macro environment, is this something that could be extended further?

B - (00:50:33)

Thanks.

A - (00:50:34)

Thanks. I mean, you bring up a great point. And I'd make even take a step back and say we've got a arsenal now of value, whether it's best deal ever, boost weeks, carry out tips, you know, emergency pizza that we could bring at any time and they've already got recognition around the country. We're not, we're not starting from scratch and so that gives us optionality. That said, you know, we've built our Q4, we obviously never give forward looking information on what that is, but we feel really good about the quarter. Obviously we've started with best deal ever and you'll see us leaning into all aspects of Hungry for more in Q4. Thank you. And our final question comes from Zach Fatem with Wells Fargo. Your line is now open. Hey, good morning and thanks for fitting me in. Can you talk about the metrics you look at internally to measure the success of a promotion and in light of the environment today and elevated industry discounting, Curious how your promotional success has evolved better or worse as industry promo steps up? Yeah, that's a great question. Maybe I'll answer it a couple ways. One is I think we're really unique in that the discounts we're offering during these tougher macro times are off items that people actually want. A lot of what we're hearing now are the discounts I'm getting out there are not on the kind of the main item that I want. How we determine what we put on TV or on the website, Zach, is we got a pretty good formula for success history here, which is essentially we know if we can drive profitable order counts that works to drive franchisee profitability. Short term gains in ticket at the sacrifice of order count once your pricing is in the right realm are not sustainable. That's what we're seeing now. If you just looked at best deal ever and said, hey, are you going to get the same volume that you would do on non best deal ever, Then you'd say, oh, I'm not going to do that because we're not putting enough dollars in the bank. But something like best deal ever, we know ahead of time from the research what it's going to drive. And so we could be a little bit more aggressive on the price point because we always tell our franchisees we put dollars in the bank, not percents.

B - (00:53:11)

And I'm going to add one thing to what Russell just said. Absolutely. The lagging indicator is going to be franchisee economics and profitability for all the reasons he explained but really the leading indicator of that is compounding frequency. If we aren't seeing compounding frequency across our customer base the likelihood of actually building up into that franchisee profitability is going to be more difficult to achieve. So that's something that I've been actually watching continuously happening since we lost Hungry for More and I think the loyalty program ends up being the perfect accelerator for all of that to happen.

A - (00:53:47)

Yeah, I think the idea of looking at order counts and frequency like Sandeep said is a great way not to just look at our business but to look at all restaurant businesses. Order counts are key to sustained success. Thank you Zach. That was our last question of the call. I want to thank you all for joining our call today and we look forward to speaking to you all again soon. You may now disconnect.