Domino’s Pizza(US:DPZ)2024-04-29 16:27Financial Data and Key Metrics Changes - In Q1 2024, U.S. same-store sales increased by 5.6%, driven by transaction growth from the new loyalty program and promotional activities [67] - Global retail sales grew by 7.3% excluding foreign currency impact, with U.S. retail sales increasing by 7.8% and international retail sales growing by 6.8% [29][30] - Income from operations increased by 19.4% in Q1, primarily due to higher global franchise royalty revenues and improved supply chain gross margins [30] Business Line Data and Key Metrics Changes - The carryout segment saw a strong comp performance of 9.5%, while delivery increased by 2.9%, indicating a shift in consumer preference towards carryout [67] - The new loyalty program significantly contributed to the increase in order counts, particularly among new, lapsed, and light customers [24][43] Market Data and Key Metrics Changes - International same-store sales, excluding foreign currency impact, increased by 0.9% in Q1, with a net addition of 144 stores globally [47] - The company expects international comps to remain soft in the first half of the year but anticipates acceleration to 3% or more in the latter half [31] Company Strategy and Development Direction - The "Hungry for MORE" strategy focuses on driving sales through product innovation, operational excellence, and enhancing customer loyalty [21][40] - The introduction of the New York Style pizza aims to attract customers preferring a thinner crust, indicating a commitment to product diversification [22] - The company plans to maintain a consistent promotional cadence similar to 2019, with around six boost weeks expected throughout the year [25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the sustainability of the current growth trends, emphasizing the repeatability of the "Hungry for MORE" strategy [74] - The company anticipates continued strong performance in 2024, driven by the loyalty program and promotional activities [45][69] Other Important Information - The company is investing in consumer technology and supply chain capacity to support future growth, which may impact operating income margins in the short term [49] - The loyalty program has been a key driver of sales, with significant engagement from new and light users [43][91] Q&A Session Summary Question: Can you discuss the supply chain margin and overall operating margin strength? - Management noted that procurement productivity has improved, but investments in supply chain capacity may pressure margins in the latter half of the year [54] Question: What drove the acceleration in same-store sales? - The increase was primarily driven by order count growth, particularly from the loyalty program [56] Question: How does the promotional environment affect profitability? - Management highlighted that profit dollar growth continues to be strong, with a focus on driving value rather than just margin expansion [60] Question: What are the expectations for international market growth? - Management expects international comps to improve in the latter half of the year as key markets implement the "Hungry for MORE" strategy [118] Question: How is labor availability impacting the business? - Management indicated that labor availability has not been an issue, as evidenced by increased order deliveries and improved delivery times [87]