Uber Partnership and Sales Mix
Q: How will Uber impact sales and marketing?
A: Management expects the Uber partnership to significantly boost sales, with an aim to reach a 3% exit rate of sales through Uber by the end of the year. Marketing efforts have just been turned on, and as awareness grows, they anticipate a meaningful uptick in orders from Uber. They remain confident in achieving the projected sales mix growth.

Core Traffic Growth and Same-Store Sales
Q: Can you drive positive orders excluding Uber's impact?
A: Yes, management anticipates positive growth in both carryout and delivery orders, even without considering Uber’s contribution. They expect the Hungry for MORE strategy to continue driving transaction growth throughout 2024, building on the improvements made in 2023.

Unit Growth Outlook, Domestic and International
Q: What's the outlook for store openings globally?
A: They are confident in their guidance of 1,100+ stores over the next 5 years, with strong domestic momentum and international growth expected to accelerate, especially in the back half of the year. While closures impacted numbers in some regions, they believe those are behind them and foresee robust expansion ahead.

Company Margins and Supply Chain Profitability
Q: How are company margins and supply chain profits?
A: Company store margins were impacted by insurance costs and loyalty program accruals but are expected to expand moving forward. Supply chain profitability saw significant gains from productivity improvements, which are expected to continue driving profit dollar growth in 2024, fueled by transaction growth and operational efficiencies.

Loyalty Program Impact and Outlook
Q: What are expectations for the loyalty program?
A: The loyalty program is off to a strong start, adding 3 million members last year, with 2 million joining after the new program launch. It drives frequency, especially among lower-frequency and carryout customers, and management believes it will be a significant contributor to same-store sales growth in 2024.

International Sales Outlook and Market Pressures
Q: How are international sales and challenges addressed?
A: Despite some macroeconomic pressures in certain markets like Europe and India, management is optimistic about international growth. They are applying the Hungry for MORE strategy globally and expect improvements, particularly in the second half of the year, as they focus on market-specific strategies and share gains.

Franchisee Base Evolution and Store Openings
Q: What's the status of franchise growth and openings?
A: The U.S. system added over 60 new franchisees, the most in 15 years, indicating strong franchisee confidence. There are already 170 new potential franchisees in or graduated from franchise management school, and management expects to exceed store opening targets in 2024, reflecting a positive outlook from franchisees.

European Slowdown and Online Ordering Fee Reduction
Q: Why reduce the online ordering fee amid European slowdown?
A: Management views the pressures in Europe as transitory, working closely with franchisees to address challenges, particularly in markets like France. The adjustment to the online ordering fee was part of balancing investments in technology and restoring advertising fund contributions, aiming to support franchisee profitability and growth.

Supply Chain Profit Growth Breakdown
Q: How much did productivity boost supply chain profits?
A: A significant portion of the $23 million year-over-year increase in supply chain profit came from productivity improvements, primarily driven by procurement efficiencies following inflationary pressures in 2022. While such outsized gains may not recur in 2024, ongoing productivity efforts and transaction growth are expected to sustain profit growth.

Technology Overhaul and AI Partnership Benefits
Q: What are the benefits of the new technology and AI?
A: The rollout of Pulse 2.0 and the partnership with Microsoft on generative AI aim to enhance both front and back-of-house operations. Benefits include operational efficiencies, improved food quality, and a better working atmosphere for team members. The most impactful elements are being implemented now, with broader deployment expected later in 2024.

Impact of Emergency Pizza Promotion on Transactions
Q: How did Emergency Pizza affect transactions?
A: The Emergency Pizza promotion was a resounding success, significantly boosting transaction growth and driving customers into the loyalty program. It attracted new customers and increased frequency, particularly among lower-frequency users and carryout customers. Management plans to leverage similar promotions to sustain growth.

Competitive Environment and Product Innovation
Q: What's the competitive landscape and product plans?
A: Management focuses on outperforming themselves rather than competitors, anticipating a challenging year for order counts industry-wide. They are reinvigorating their product lineup, reintroducing pan pizza (first promoted since 2014) and planning to launch two or more new products this year to drive growth.

Transaction Growth Across Income Cohorts and Delivery Speed
Q: Is transaction growth across all income groups, and how is delivery speed?
A: Positive transaction growth is considered unique in the industry and is expected across all income cohorts. Delivery times are back to 2019 levels, with a focus on continuous improvement and ensuring high-quality food. They strive to deliver each pizza as if it's for a first-time customer, emphasizing both speed and quality.

Advertising on Uber Platform
Q: How effective is advertising on Uber?
A: Advertising on the Uber platform is highly promotion-driven, aligning with Domino’s expertise in excelling on marketplaces. Management is confident in increasing the percentage of sales through Uber to the 3% exit rate as they leverage promotional strategies and marketplace dynamics.

Loyalty Program Liability and Breakage Levels
Q: How should we track loyalty liability and breakage?
A: The adjustment to the loyalty liability reflects the expected increase in redemptions due to the new program's success. While it's appropriate accounting for anticipated activity, management suggests focusing on profit dollar growth and will continue to provide disclosures as they monitor breakage and redemptions.

Company Margins and Competitive Dynamics
Q: Should we expect profit growth or margin expansion?
A: Excluding impacts from insurance and loyalty liability adjustments, company store margins have expanded. Management anticipates both profit dollar growth and margin expansion as they leverage fixed costs and drive transaction growth. They expect to outperform the industry, which may face pressure on orders and transactions.

International Sales and Execution Issues
Q: Are international challenges due to execution or macro pressures?
A: Management acknowledges both market-specific issues and macroeconomic pressures affecting international sales. They are optimistic about overcoming these challenges by applying the Hungry for MORE strategy across markets and expect improvements as they focus on execution and share gains, particularly in India and other key regions.

Frequency Shifts in Loyalty Program
Q: Any trends in customer frequency post-loyalty changes?
A: While still early, initial data indicates that the loyalty program is driving the expected increases in engagement among carryout customers and lighter users. Management plans to share more insights as they accumulate data over time, focusing on lifetime customer value and sustained usage.

Supply Chain Productivity and Investments
Q: Will productivity improvements continue in supply chain?
A: While 2023 saw significant productivity gains in the supply chain, such outsized improvements may not continue at the same level in 2024. Management expects to invest in capacity and focus on transaction-driven profit growth, with productivity efforts serving as an offset to these investments.