Domino's Pizza, Inc.

Thank you for standing by and welcome to Domino's Pizza's first quarter 2023 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'll need to press star 1-1 on your telephone. To remove yourself from the queue, simply press star 1-1 again. As a reminder, today's program is being recorded. And now I'd like to introduce your host for today's program, Mr. Ryan Goers, Vice President, Finance Investor Relations. Please go ahead, sir.

Thank you, and good morning, everyone. Thank you for joining us today for our conversation regarding the results for the first quarter of 2023. Today's call will feature commentary from Chief Executive Officer, Russell Wiener, and Chief Financial Officer, Sandy Freddie. 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 10Q 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 8K 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 one-part question on this call. Today's 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 good morning, everybody. Thanks for joining us on today's call. I'd like to start this call where we finished our last one, looking back on what we said we were going to do. I am really proud of the actions that our team and our franchisees have taken and the positive results that they delivered. You'll recall that there were three themes we discussed last quarter. The first one was the continued evolution of the Domino's brand, from a U.S. delivery business to a global pizza company with leadership in both delivery and carryout. We continue this progress since our last call. Let me start off with China. We're proud to welcome our partners, DPC Dash, our master franchisee there, to the growing list of public companies that are developing and operating Domino's pizza stores across the globe. On March 28th, CEO Eileen Wang and her team completed their IPO on the Hong Kong Stock Exchange. We have got tremendous potential in China, where the Dash team believes they've just scratched the surface of their total opportunity with stores operating in only 17 cities in China. Now, speaking of public companies, as of the end of Q1 2023, six of the top 20 public QSRs in the world, as measured by market cap, are part of the Domino's family. DPZ is joined by our master franchisees, Jubilant Foodworks, Domino's Pizza Enterprises, Alsea, Domino's Pizza Group, and Alamar, all in the top 20. This, to me, exemplifies an important strength of our brand. We've got a diverse portfolio of more than 90 markets around the world. So our international business has both scale and balance. And what this affords us is the ability to weather any short-term headwinds in certain markets should they come up. We've seen this dynamic play out in Q1 with markets performing exceptionally well, balancing out others that are facing more pressures. All of this, though, resulted in positive international same-store sales growth for the first quarter. Now on to the U.S. In the U.S., we believe that the QSR pizza delivery and carryout businesses continue to be incremental to each other with limited overlap. We're number one in both segments and believe we've strengthened our position during the first quarter. The balance we have in our stores with carryout contributing around half the orders and 40% of sales has allowed us to mitigate the more recent macro headwinds in the delivery category. The second theme we discussed in our last call was the need to maintain value in what is a competitive marketplace, where our customers decide every day where to spend their hard-earned dollars. Value has to do with the right balance of price and service. Our U.S. business delivered on both of these things in Q1, and I'll start with pricing. On pricing, I mentioned that we and our franchisees have got to be mindful that value on our menu exists outside of our national offers. Menu prices and delivery fees were relatively stable throughout Q1. That means most of the menu pricing increase we saw in the first quarter versus prior year was carryover from changes that were made in 2022. On service and capacity, our stores and our franchisees continue to make progress on both fronts. Estimated average delivery times in the first quarter were over a minute better than the first quarter of 2022. While our goal is to get back to and improve on our delivery service levels from 2019, I'm really encouraged by the continued improvement we and our franchisees have made in this critical measure. Our system understands that to be the best, you need to beat the best, even when the best may be yourself. And that's why we're launching an important initiative. We're calling it our Summer of Service Training Program. We're inviting all of our US franchisees to come to Ann Arbor to be part of one of the largest system training efforts in our history. Look, we've driven significant improvements in our back of house technology and our circle of operations over the last few years, and we've got more coming. The Summer of Service program will allow us to share best practices with our franchisees who we expect will leave Ann Arbor with specific plans that they create to positively impact service for every one of their stores. I think these changes will also improve the experience for our customers and our team members in our corporate and franchise stores. Our third theme from the last call was around the need to drive more innovation. While new products are certainly one way to do that, our brand has a history of bringing news to all aspects of the business. We dialed up innovation over the last few months and anticipate this will continue throughout the year and into the future. Let's start with product innovation. On the product side, we're really pleased with the launch of our Loaded Tots. For consumers, Loaded Tots offer a craveable potato side that delivers extraordinarily well. nicely into our mix-and-match menu, providing great value and even more variety when consumers build their orders. For franchisees, tots drive healthy tickets, given they've been largely incremental and have a strong margin profile. Early signs point to Loaded Tots performing even better than our last two product launches, Distant Twist and the Chicken Taco and Cheeseburger Specialty Pizza. To drive news and ordering convenience in our carryout business, we launched a convenient way for consumers to place their orders while they're on the go with Apple CarPlay. This innovation allows customers to place and track their orders on CarPlay via our iOS app. CarPlay ordering is a great alternative to drive-through because it allows customers to avoid long lines by placing their orders while they're on the go so their food is hot and fresh and ready when they arrive at their local Domino's. As important as the ordering platform is itself, CarPlay ordering will help drive what we call our techquity, short for technology equity. We've got a history of leveraging technology to improve customer experiences, and Domino's CarPlay ordering continues that tradition. On the delivery innovation side, Domino's fleet of electric vehicles has been expanding. We announced on our last calls that the initial order by our corporate stores and franchisees made us the largest electric fleet of pizza delivery vehicles in the country with 800 cars. Today, Domino's has committed to over 1,000 EVs and counting. The EV fleet is great for our stores and the environment, all while growing the potential pool of drivers by offering opportunities to individuals that may not have access to a car. All of this news contributed to positive U.S. same-store sales growth in Q1 and will provide momentum for Domino's into the future. Now, for more detail on the quarter, I'd like to turn it over to our CFO, Sandeep Reddy. Sandeep.