Domino's Pizza, Inc. Q2 FY2025 earnings call

• Product Innovation: Launched Parmesan stuffed crust pizza, which drove same-store sales and positive transaction counts; customer feedback on the product has been highly positive.
• Value Initiatives: Domino's rewards program boosted carryout growth; best deal ever promotion running; leveraging national promotions and aggregator platforms (e.g., DoorDash rollout) for renowned value.
• Franchisee Focus: Refranchised 36 company-owned stores in Maryland to an experienced franchisee, highlighting strong franchisee economics and brand position for long-term success.
• Supply Chain/Operations: Strong supply chain performance contributed to gross margin growth; lower G&A expenses due to refranchising and organizational realignment.

US: Retail sales grew 5.1% in Q2, driven by same-store sales of 3.4% (boosted by Parmesan stuffed crust pizza launch), carryout comps up 5.8% (highest average carryout dollars on record), delivery up 1.5%. Added 30 net new stores, bringing US system store count to 7,061. International: Retail sales grew 6% (excluding foreign currency impact), driven by net store growth of 148 and same-store sales of 2.4%. Strength in Asia (India) and Americas (Canada, Mexico) noted.

• US Comp: Expect 3% US comp for 2025, with higher growth in the second half.
• International Same-Store Sales: Anticipate 1%-2% growth in international same-store sales due to potential macro and geopolitical uncertainty.
• Store Growth: Expect 175+ net stores in US and internationally combined.
• Foreign Currency Impact: Foreign currency is expected to be a 1% headwind on operating income growth, though volatile.

• Macro/Geopolitical Uncertainty: Potential impact on international same-store sales and retail growth.
• Competition: Intense competition in international markets and QSR space could hinder market share gains.
• Supply Chain/Cost Pressures: Fluctuations in food inflation and supply chain costs may affect margins.

Q: David Palmer from Evercore ISI asks about sustaining 3%+ comps.

A: Russell Weiner emphasizes long-term initiatives like product innovation, aggregator rollouts, and strong franchisee economics as drivers for sustained growth.

Q: Dennis Geiger from UBS inquires about US sales outlook for the back half.

A: Russell and Sandeep discuss carryout growth fueled by Domino's rewards, DoorDash rollout progress, and expectations of positive delivery and carryout performance in the back half.

Q: Brian Bittner from Oppenheimer asks about DoorDash as a multiyear growth vehicle.

A: Russell Weiner states DoorDash is a multiyear driver, highlighting market share potential and the brand's ability to compete effectively over time.

Q: Danilo Gargiulo from Bernstein asks about international market share and More strategy.

A: Russell Weiner discusses India's success with Hungry for More pillars and adoption of the strategy by other markets, emphasizing operational excellence and renowned value in international expansion.

Q: David Tarantino from Baird asks about international unit development.

A: Sandeep Reddy talks about international unit plans, progress in key markets like India and China, and ongoing evaluations of unit economics in DPE markets.