Domino's Pizza, Inc.

Good day, and thank you for standing by. Welcome to the first quarter, 2026 Domino's Pizza Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Greg Lemenchik, Vice President of Investor Relations and Sustainability. Please go ahead.

Good morning, everyone. Thank you for joining us today for our first 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 10Q, 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 8 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, and good morning, everybody. Q1 represented another quarter of positive order count and market share growth for Domino's in the U.S. While I was pleased with our start to the year, performance for the rest of the quarter did not meet our expectations, resulting in same-store sales of 0.9%. We are very clear on the drivers of our results, and we'll do everything within our control to address them by adjusting our plans in the second half of the year. Looking back at Q1, pressure intensified throughout the quarter, in particular in March, because of growing consumer uncertainty. Consumer sentiment hit COVID-level lows and ongoing inflation continued to impact purchase decisions. Weather also affected our business in the quarter, including the beginning of our carryout special boost week. Competition within the QSR pizza space also increased in Q1. as the national pizza players offer deals comparable, if not identical, to the renowned value Domino's has made famous. While this created some short-term pressure, we believe Domino's wins in a sustained value environment. Our advantage is profit power, the ability to offer compelling ongoing value while driving profit growth for Domino's franchisees. Our industry-leading advertising budget drives the order counts needed to make this value model work profitably over time. Our pizza competitors simply don't have that same capability. As a result, we believe that when competitors match our value, it places significant pressure on their franchisee economics. Over time, we expect this pressure to contribute to more store closures on top of the roughly 450 closures our two public pizza competitors have already announced for 2026. I believe these dynamics will translate into more sales, more stores, and more profits for Domino's franchisees. In Q1, we continue to make strong progress on our Hungry for More strategy. I want to call out a couple of areas, particularly within the operational excellence pillar that we believe will play a major role in driving our future success. We fully launched our new app. including improvements to our world-famous Pizza Tracker, which has tracked more than 2.5 billion orders since 2008. This new modernized app is much easier for our customers to use and will allow for more personalization over time. And the updated tracker provides more precise ready time based on new AI technology, live activities for iOS users, and a more detailed view of each order's progress. The closer we can deliver our products to the time we promise our customers, the more they come back in the future. The updated tracker helps us do just that. In addition to the consumer-facing app, we made progress in our back-of-house DomOS orchestration agent that makes production more efficient and effective. This orchestration agent allows in order to be prepared hot and fresh for our customers in the most efficient way possible. For example, if there's not going to be a driver back in time to pick up a pizza when it exits the oven, this technology can alert a store to hold that order so it isn't made until a driver is there. Our goal at the end of the day is just in-time pizza making, which will result in a more consistent, higher quality product for our customers. As I finish up, I want to highlight why I remain so bullish on our business now and in the long term. On our February earnings call, I shared my view on QSR pizza category growth and my confidence that we can outperform the competition and capture meaningful market share in 2026 and beyond. That view remains unchanged. I'll start with 2026. We are committed to doing everything we can to deliver 3% same store sales in the U.S. for the year. While I already addressed why we believe we missed our plan in Q1, Those were reasons, not excuses. Our team is hard at work making the adjustments we believe are necessary to drive an even bigger impact in the current macro environment. I'm especially energized by the product innovation we're bringing in the second half of the year, particularly around pizza, which goes beyond what we originally planned. It's bold, exciting, and has real potential to elevate our brand. now to my belief in the long term which is as strong as it has ever been you've heard me talk about how we've taken 11 points of market share over the past 11 years in the u.s let's go a little bit deeper let me tell you how we gained that market share we did it by driving more sales more stores and more profits first sales our same store sales have grown on average more than five percent annually over that time period next doors We've opened more than 2000 net new stores over the last 11 years amidst a backdrop of significant competitive closures. And finally, profits. Our average franchisee has increased profits almost $80,000 per store. This means the Domino's franchise system is earning $740 million more in profits than it did just 11 years ago. This has been and will remain our formula for success. More sales, more stores, and more profits drive more market share. More market share drives scale, which strengthens our competitive advantage. That is the domino's effect. Working for over a decade, delivered again in Q1, and one we expect to continue well into the future. I'll now hand the call over to Sandeep.