Domino's Pizza, Inc.

Thank you for standing by and welcome to Domino's Pizza's fourth 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 this session, you'll need to press star 1-1 on your telephone. If your question has been answered and you'd like 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, Greg Lemenchek, Vice President, Investor Relations. Please go ahead, sir.

Good morning, everyone. Thank you for joining us today for our fourth quarter conference call. Today's call will begin with our Chief Executive Officer, Russell Wiener, followed by our Chief Financial Officer, Sandeep Reddy. The call will conclude with a Q&A session. The forward-looking statements in this morning's earnings release and 10-K, both of which are available on our IR website, also apply to our comments on the call today. 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. This morning's conference call is being webcast and is also being recorded for replay via our website. 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 one question only. With that, I'd like to turn the call over to Russell.

Thanks, Greg. I thought you were going to sing the opening as we discussed, but I guess we'll let that pass today. Welcome to your first call here on Domino's, and good morning to everyone joining us. Our strong Q4 demonstrated that our Hungry for More strategy is already delivering results. Our positive us same store sales and transaction growth in both delivery and carry out underscore the strength and momentum that we're building in our business. These results in the initiatives that I'll cover today, give me confidence in Domino's ability to continue to drive meaningful value for shareholders. We're excited to share an update on the business through the lens of our hungry for more strategy. Now, as a reminder, hungry for more is our new strategy around what we're going to do to deliver, over the course of the next five years, more sales, more stores, and more profits. We're going to accomplish this through our four more pillars, M-O-R-E, that I'll share a brief update on. Let's start with M. M is for the most delicious food. Now, we know we have the most delicious food in the industry, but you know what? It's time to talk about it more. It's time to show it more, and we're already doing that. We're currently on air with pan pizza advertising for the first time since 2014. We call pan pizza our best kept secret. It's time to change that. Pan pizza is a delicious product made with fresh, never frozen dough. It also showcases the variety of crusts we have to offer. You're probably also noticing a shift in our advertising as we're beginning to romance the product more to showcase the deliciousness of our food. You can expect this to continue throughout the year. The O in hungry for more stands for operational excellence. And this is how we're going to deliver on our promise to have the most delicious food by consistently driving a great experience with our products. As we've noted before, we made meaningful strides operationally in 2023 with our summer of service program, which has resulted in service times being back to pre-COVID levels. But we're never satisfied and we want to continue to get better. Our operators and our franchisees We are hungry for more. In 2024, we're rolling out a new service program. We're calling that More Delicious Operations. This program will be a series of three product training sprints focused on our dough, how we build and make our products, and how we cook them. All of this is being done with a keen focus on driving more consistency in our food by providing the proper teaching, tools, and processes for our team members to succeed. Our third pillar is R for renowned value. We've always been known as a premier value player, and we believe this can continue to be a differentiator for us in 24 through our improved loyalty program, our national promotions, and our rollout on Uber. Domino's Rewards is off to a great start and was a key driver of our strong comp performance in the fourth quarter when we saw positive sales and transactions in both our U.S. delivery and carryout businesses. We've also seen the following, an uptick in active members. We are up 3 million active members in 2023, with 2 million plus since our relaunch in September. Domino's rewards ended the year with approximately 33 million active members. A big driver of the increase in active members, as well as the early success of the program, was our emergency pizza promotion, which was an innovative marketing initiative that drove increased order counts and acquisition of customers into Domino's rewards. We're seeing more redemptions than ever before, and we're seeing them at those lower tiers that we implemented. And we know that this program has driven incremental profit dollars for our franchisees, so customers are getting more, and franchisees have earned more profits. Truly a win-win. Finally, we're seeing more Kara users and Lite users in the program than we were prior to the relaunch. So Domino's Rewards is working as we intended. National promotions will be another way we'll drive renowned value in 24, and right now we're on air with our perfect combo promotion. We believe this is the best deal in the QSR industry to feed a family, and it highlights the depth we have in our menu. We also brought back our carryout special boost week in January for the first time since January 2020. And its performance exceeded my expectations. Clearly, customers want value, and we are driving it profitably for our franchisees. While providing value through our own channels is one part of our barbell strategy, tapping into the aggregator marketplace is the other. We're very excited about this new sales layer, which we believe is a different and largely incremental customer that we had not been able to reach in the past. Our entrance into this marketplace with Uber is on track as we are now fully rolled out across our U.S. system. We've gone live with the marketing and formally kicked off our one-year exclusivity period in Q1. Sales are building in line with increased marketing, which has been great to see, and we expect those orders to continue to grow throughout the year. Sandeep will share more about our sales expectations in 2024 for Uber in his comments. Now, everything we do at Domino's is enhanced by our best in class franchisees, the E in our hungry for more strategy. In 2023, we continue to enhance our U.S. franchisee base by adding more than 60 new franchisees to the system, the most in 15 years. Every one of these new franchisees started with Domino's either as a delivery driver or from within our system. This remains the secret sauce to our success. We ended 2023 slightly ahead of our expectations on U.S. store growth and profits, adding 168 net new stores and finishing the year with estimated average franchisee profitability per store of $162,000. This highlights the momentum we expect to continue into 2024. I couldn't be more excited about 2024 and beyond for Domino's Pizza. Our foundation has never been stronger in our ambition. has never been greater. We made a ton of progress in 2023, and our strong start to 24 gives me confidence in our ability to win with customers and drive return for Domino's franchisees and shareholders. Now, with that, I'll turn things over to Sandeep.