Good morning. My name is Adam and I'll be your conference operator today. At this time, I’d like to welcome everyone to the Third Quarter 2017 Earnings Call. [Operator Instructions] Tim McIntyre, you may begin your conference.

Thank you, Adam. And hello, everyone. Thank you for joining us on the call today about our very busy third quarter 2017. As you know, this call is primarily for our investor audience, so I kindly ask that all members of the media and others be in a listen-only mode. In the unlikely event that any forward-looking statements are made, I refer you to the Safe Harbor statement you can find in this morning's release. As always, we will start with prepared comments from Domino's' Chief Financial Officer, Jeff Lawrence, and from Chief Executive Officer, Patrick Doyle, followed by analysts' questions. With that, I'd like to turn the call over to our CFO, Jeff Lawrence.

Thank you, Tim, and good morning, everyone. In the third quarter, our positive global brand momentum continued, as we once again delivered solid results for our shareholders. We continued to lead the broader restaurant industry with 26 consecutive quarters of positive U.S. comparable sales and 95 consecutive quarters of positive international comps. We also continue to increase our store counts at a healthy pace, which we believe is more evidence that our brand is strong and growing. Our as-adjusted diluted EPS, which excludes the impact of our recapitalization completed during the quarter, was $1.27, which is an increase of 32.3% over the prior year quarter. This increase primarily resulted from strong operational results, as well as a lower effective tax rate. With that, let's take a closer look at the financial results for Q3. Global retail sales, which are the total retail sales at franchise and company-owned stores worldwide, grew 14.5% in the quarter. When excluding the impact of foreign currency, global retail sales grew by 14.2%. The drivers of this retail sales growth included strong domestic same store sales, which grew by 8.4% in the quarter. Our U.S. franchise business and our company-owned stores were both up 8.4%. These comp increases were driven primarily by order count or traffic [growth] [ph], as consumers continue to respond positively to the overall brand experience we offer them. Our Piece of the Pie loyalty program continues to contribute significantly to our traffic gains. To a lesser extent, ticket also increased during the quarter. The hurricanes in Texas and Florida negatively impacted our Q3 company-owned store comp by approximately 1 percentage point, and negatively impacted our Q3 U.S. franchise comp by less than half a point. As a reminder, we operate company-owned stores in both the Houston and Miami markets. We also have…

Thanks, Jeff. And good morning, everyone. While our fundamentals have taken over a decade to truly develop and solidify, our strategy and approach related to the business remains quite simple. And my third quarter commentary will follow suit. The quarter can be best described as us continuing to execute our established approach, and simply do what we do best, remaining steady in our long-term strategy and proven foundation, aligning with the domestic and international franchise base that continues to prove it is second to none, and refusing to compromise when investing in our innovative forward-thinking brand, which we believe has led to us selling more pizza in the U.S. and around the world during the third quarter than any other pizza brand. No catalyst or unique shift in approach is part of our continued strong global performance. Instead, we continue to heavily lean on the foundation built over time, fundamentals that our company and franchisee leadership have all come to fully trust. The ability to rely on this has certainly taken time. A great deal of homework goes into our occasionally difficult but always calculated decisions. But this long-term leg work and the many moves and risks that followed have positioned us for the fundamental strength that remains at the forefront of another outstanding quarter. Our strategy remains simple. Single-minded focus on continually improving every aspect of the experience for our customers and funding those investments by skipping the flavor of the month activity so common in our industry. Our U.S. results in the face of our second highest quarterly comp lap in the past seven years were tremendous. In addition to very strong sales, store growth continued to progress in the right direction as our focus on unit level economics and franchisee profitability continues to support this strong alignment…

Your first question comes from the line of Gregory Francfort with Bank of America. Please go ahead.

I had two questions. The first one was just I think the last time you had a fee increase, you helped size up the magnitude of that impact. And I know that's on a gross basis and not net of the investments, but any help on sort of what the magnitude on that change, the $0.04 change is to your revenue?

We’re not actually going to be giving guidance on the actual dollar amount, but you’ll start to see a flow through in the first quarter of 2018.

And then maybe just on the franchise revenue over franchise sales, I think the domestic business basically had a slowdown in terms of that line, and I know there's some lumpiness, but the international business had a pick up. I mean, what drove the lumpiness? And I guess is some of it on the international side, just big franchisee sign-up on the PULSE business? Or is it maybe more of an ongoing step up?

I mean, the dynamics you have on the U.S. side for franchise kind of effective percentages are more around store opening incentives that we provide in certain circumstances. That sometimes can bring that down from the general 5.5% contractual rate that is paid. On the international side, you do have fees coming in on the technology, on our global platform which is in now more than 30 markets around the world. That can help it. The thing that kind of hurts that a little bit in the last year or so has been all the conversions that we’ve done. So a little bit of puts and takes there, but that’s going to bounce around a little bit as that map plays out.

Is the conversion drag done? Are we done with that?

No, the conversion, incentives that we give so that they have the capital to reinvest in the brand and put up the leaseholds and the signs and such can generally last a couple years or so, and it starts to ramp back up to the normal rate. So that’ll have a little bit more time to get back to where we need it to be.

And your next question comes from the line of Brian Bittner with Oppenheimer. Brian, your line’s open.

Patrick, the strong same-store sales results obviously speak for themselves. But I just want to ask your perspective on the competitive front as you look forward. As you manage this business, what really has your attention the most? Is it people with -- the several players within the pizza space trying to improve on the leverage that they already have? Or is it the countless players outside the pizza space trying to get into delivery?

Yes, Brian, the real answer is that we’re watching all of those things, and we’ll continue to watch all of those things. We don't generally react to them, and as you’ve heard me say in the past, kind of specific pricing initiatives or promotions from competition just don't have that much relative effect on our results. And a lot of that just has to do with the level of fragmentation in the pizza category which remains far more fragmented than other restaurant categories. And so a specific customer or somebody new coming in is going to have less effect just simply because there's still so much more share that can be taken. So we watch all of those things, but ultimately, the decisions on how we run our business are going to be made off of the data that we’re collecting on our own customers' research that we’re doing. And that's really going to drive our actions. We certainly are watching everything else as changes are made, but decisions are being made based on our own customers and what we think is going to give them a better experience.

And that just kind of segues into the next question where you talked about the same stores sales strength being mostly tied to the loyalty. And I'm just wondering how you understand that, how you know that. Does that mean that all the increased frequency is simply coming from loyalty customers? Is that kind of what you mean by that?

No.

And what percent of your base is loyalty at this point?

So first of all, we didn't say that most of it came from loyalty. We said that it was significant. And so I want to clarify that first. It certainly has been an important part of our results over the course of the last couple of years since we launched loyalty. Beyond that, we are not yet giving kind of specifics around our loyalty program metrics on the loyalty. But in terms of how do we know the effect that it's having, we have pretty extraordinary data based on our model and used that actively to kind of model out our business. And we understand pretty clearly what is driving our business and how each of the components of the things that we’re doing are kind of feeding into that. So we know pretty precisely what's driving our business. We are not going to share that because we don't want to help our competition make better decisions around their business, but clearly loyalty has been helping. It’s been significant, but I didn't say that it is most of what's been driving the results.

And your next question comes from the line of Peter Saleh from BTIG. Peter, your line’s open.

I just wanted to ask about the G&A guidance. If I heard you right, I think it's going up about $5 million to $10 million for this year. Just wondering what’s changed versus earlier this year on your G&A? Is this a pull forward from next year or is this just straight up an increase for this year?

Peter, this is Jeff. It's really just the continuation of the investments that are planned plus the additional expense that you get when quite frankly you grow sales as fast as we do. We have things that are variable in G&A that correlate directly to sales growth. So as we continue quarter after quarter to put up the kind of results we’re seeing, at some point we’re compelled to kind of update that guidance. We believe the 350 to 355 number is the right number with kind of three months to go. And that's why we are raising it at this point.

And then just on the tech fee increase, the $0.04 increase, did the franchisees have to vote on this at all, or was there any pushback on this increase, or was there generally speaking a lot of buy-in on this increase?

No, they don't have to vote on it, but, we are continuing to produce the results that we are because we’ve got great relationships with our franchisees and a lot of trust between us. And they are very excited about the investments that we’ve been making in technology and understand that if we’re going to continue to grow our lead, or at least maintain our lead in technology, we're going to need to continue to invest there. And so they’re very supportive of this increase. I think it's been about three years since we have changed the fee. We still are the best deal in the industry, and they recognize that as well. But we've got a great partnership with them, and so a specific vote wasn't required, but we're very cautious and we worry as much about their financial results and their ROI as we do about anything else. And so we recognize and are going to be very careful about how we take increases over time.

Your next question comes from the line of Will Slabaugh from Stephens. Will, your line’s open.

And in the past, you’ve talked about growth rates in delivery versus carryout, and just given investments especially that you’re making now and have been making to your physical assets domestically. So I’m curious if you could just speak to kind of how those two businesses are doing. And then also, what that mid-term growth might look like internationally where it makes sense.

Yes, it's continuing to grow nicely on both fronts in the domestic side. Over time, we've gotten a little more growth out of carryout than out of delivery, but we’re getting traction on both fronts domestically. And I think the same is really true overall in international, though that's going to vary a little bit market to market. But we're seeing strength on both.

And one quick follow-up, if I could, on, Jeff, I believe a comment you made about lower performance based comp. I was just curious, with the results that you put up, why that may be the case.

Well, just we have pretty aggressive internal goals here. We don't -- we’re not resting on our past success, so when we get together with our board and they put our internal goals together, they’re pretty aggressive. And despite the fact that we had what we believe to be just a blowout great quarter, it was just a little bit lower than it was as far as outperformance versus the prior year, when you look at Q3 over Q3. And so when you add that up, it's a little bit less.

And your next question comes from the line of Sara Senatore from Bernstein. Sara, your line’s open.

I had a sort of a multipart question. The first one is just on your current advertising -- the blood, sweat and teardowns. I'm just trying to understand who that is talking to. Is it customers to talk about your assets, or are you speaking to franchisees who -- or potential franchisees? And I guess just generally what’s the message there? If it is for customers, is it about carryout? And then I do have a question about the competitive environment, please.

Sara, yes, it is absolutely the customers, and it's about carryout. And the environment in our stores is better now. All the people in those ads are franchisees in our system. They’re all good friends. And they’re proud of their stores and the way they’ve rebuilt them, and they are excited to show them off to customers.

And the second question is just you mentioned that you don't react to competitor actions. But it looks like maybe there’s been some more price point competition about specific price points, like $7.99. So I guess I'm curious, are you seeing more price point competition? And even if you’re not, when you think about how your customers choose Domino's, obviously technology is a huge advantage, but 40% of your sales aren't digital. So maybe just talk a little bit about the factors that go into that, in light of what may be resurgent price competition.

Well, consistency matters on pricing to our customers. And we’ve had basically the same national offer for seven, eight years, nine years now. And so people know the value that they’re going to be able to get from Domino's, and that has continued. And I guess what I would repeat is that short-term moves in pricing from competitors generally don't have that much effect because the category is so fragmented. And our largest competitor in the U.S. in total is all of the locals, and mom and pops, and regional chains. And so kind of their pricing in the aggregate doesn't move that much because it's a lot of individual decisions. So really, this goes back to what I said in my script about we don't kind of follow a flavor of the month. We don't use pricing and new products each month and all of those sorts of things to kind of attract attention. We use our resources to invest in what we think is going to generate a better experience for our customers today than it did a year ago. And so that's the answer, is we stay very focused on what we're doing and the consistency that people get from us -- is ultimately what drives the results.

And your next question comes from the line of Karen Holthouse from Goldman Sachs. Karen, your line’s open.

In commentary on the comp drivers, this is, I think, the first time in a while that you’ve mentioned ticket, versus really emphasizing traffic as the driver. And I’m just curious what’s driving that. Is that lapping maybe some of the headwind from loyalty? Are you doing better on suggestive selling on sort of digital orders? I know you’ve talked about rolling out some more customization and personalization there. Just any help you can offer.

Yes, I mean, it still was overwhelmingly order count growth in the quarter. There was a little bit of ticket. Some of that, as I think we’ve talked about before, understanding ticket in our business is -- there are a lot of things that are going into the math equation. So it's the split between carryout and delivery. It's the split between digital and phone orders and walk-in orders. There are just a lot of different things that factor into that. One thing that probably did play into that a little bit is a year ago we started running -- or now a little over a year ago, we started running the full week carry out special. And so as we kind of start coming off of or start lapping that, the fact that that was a little bit more aggressive price point in that particular area a year ago -- and now because it's consistent, other things that may be playing into the ticket overall start having that effect. But there's nothing dramatic going on from a pricing standpoint. We’re very, very consistent as we’ve talked about it from pricing. It's really more just about kind of the component parts, what's growing a little bit more than other areas.

And your next question comes from the line of Jason West from Credit Suisse. Jason, your line’s open.

Just a couple questions. One, on the franchisee margins, obviously, it's been tough out there from a labor standpoint. We’ve got a bit higher fee now. Is there any sense of how long you can stay on this $5.99 value promotion? Or is there maybe some thought that you’d have to move off of that at some point?

We’re not going to kind of give forward-looking guidance on pricing. We certainly aren't going to give our competition kind of a heads up on that. I guess I would just repeat that the consistency of what we do is pretty powerful. And you did say on the digital increase, we haven’t had a digital increase yet, and our digital orders are more profitable on average than our non-digital orders. And the $0.04 increase would have a nominal effect on that. They will still be more profitable for our franchisees than non-digital. So overall, we’re still pretty darn bullish on franchise profitability.

And then on the international side. The unit openings there came in a little bit below. I think some estimates, and I know you guys don't guide quarterly, but you mentioned India making a strategic change perhaps. Can you talk a bit about going forward, is it getting a bit more difficult internationally to maintain such high levels of unit growth? Is there any sense that maybe things are flattening out at this sort of pace of unit growth? Or how we should be thinking about that or if there was a timing issue maybe in the quarter? Thanks.

Now, also the timing issue in the quarter is simply some of the conversions that we’ve had out there. And there was a lot of growth coming out of the conversions. And we’ve kind of -- we’re kind of rolling off of that now. So those were going to be lumpy, and it's certainly not something that you can expect on a regular basis from us. The 6% to 8% guidance on net unit growth remains the same for us, and so that is ultimately where we think we are going to be most of the time. India is still growing store counts and the business in India is doing well. And you saw their latest results. They had a nice step up in their comps. We are really the dominant player in India. But what I would say is new CEO came in, and we agree with the decision that they took the foot off the gas just a little bit. With the demonetization from a year ago, and I guess we’re just coming up on a year now and then the imposition of the GST not long after that, his view and totally agree and that the owner's view was, “You know what? Let's slow down the pace of growth a little bit while we kind of adjust around the new realities of the marketplace.” But the business in India continues to do very, very well. We’re getting comp growth. We’re getting store growth. The store growth is just at a little bit more measured pace than it was in the past. And that's the real primary difference in kind of the organic growth. But all of which is within the context of continuing to believe that our long-term guidance around 6% to 8% is correct.

And your next question comes from the line of Matt McGinley from Evercore ISI. Matt, your line’s open.

On the international comp., I know there’s a lot of markets that factor into that, so it might not be best to generalize the drivers, but last quarter you talked about improving value in some markets and also discussed store splitting as being a drag on the comp. How much of that sequential step up do you feel were improvements in those issues that you’d brought up with value and store splitting relative to one off impacts or headwinds, calendar shift technology issues and things like that in the quarter that may have depressed that International comp?

Yes, so the - any effect from splits continues to be very, very consistent. And I think kind of the balance of growth, that 6% to 8% growth in net store units and how much of that is coming from splits versus green field, has stayed relatively constant. I think we got ourselves into better shape in the U.K. That was certainly a big focus last quarter from people, and my statement at the time was it's fixable, and it was fixable. And they had a very good quarter. They released a couple of days to go, and that renewed momentum in that business. And the U.K. is 20-ish% of our retail sales in our international business. So they matter a lot in our overall comp. And so the acceleration that they had in the third quarter certainly is a big part of the overall move in our third quarter.

And then on the delivery versus carryout as it relates to the technology fee, how big is the differential in digital ordering between a carryout and a delivery customer? I was wondering that in terms of if the economics of the transaction are a little worse for you as a franchiser, if you don't get the technology fee, given that probably more of those carryout orders are done verbally rather than done digitally. So was that perhaps -- was the mix a driver of the decision to increase that technology fee, or do you feel that the features have just improved to the extent where you needed to charge more?

No, actually no on both of those. We’re not charging more because the features have improved. We increased it because we want to invest in making it better going forward. And a higher percentage of our delivery orders are placed digitally than our carryout orders. But that's not really factoring into how we’re thinking about that fee.

And your next question comes from the line of Alton Stump from Longbow Research. Alton, your line is open.

A couple of quick questions. In the U.S. first off, of course you mentioned loyalty being a bigger driver this quarter. Could you talk about maybe some of the things you’re doing from an advertising or marketing standpoint to drive that higher impact from loyalty that you saw in 3Q?

So, yes, we didn't say that it was bigger in the third quarter than in previous quarters. We just said that it continues to be a significant part of our comp growth. And what we did just say in my script is that we are going to be advertising it again this quarter. Otherwise, a lot of the support for it is coming from digital advertising and I'm not going to go into the specifics of how much of what we’re doing digitally is playing into it, but the biggest thing that we’ve done in terms of the loyalty program is change it so that you can earn anywhere. So that people can earn points if they’re ordering over the phone or if they’re ordering if they walk into the store. Though, that's relatively uncommon. They will still have to redeem digitally at the end of the process, but they’re going to be able to earn points by any order that take. So otherwise, I don't know that there's significant shift in how we’re promoting in the third quarter, but you are going to see it on television in the fourth quarter.

And just a quick housekeeping item, as far as the hurricane impact, thanks for breaking out what that was in 3Q. Is there any impact from that that could plead into fourth quarter or is all that pretty much taken care of by the end of fiscal 3Q?

Yes, Alton, this is Jeff. We expect it to be immaterial for Q4.

And I wanted ask the last one just on the international side of things. Of course, quite a strong recovery sequentially into your SACs versus 2Q. Could you just maybe give some more color on, particularly U.K., sort of what drove that recovery versus 2Q?

Yes, it really was more about getting the value equation right and it just had gotten a little bit out of line. It was very fixable and they fixed it. And we got some momentum again. And it's not deep discounting at all. But it was just getting that equation a little bit better as I think they had missed it a bit during the second quarter.

And your next question comes from the line of Jeffrey Bernstein from Barclays. Jeffrey, your line’s open.

Two questions, just one following up on the discussion of delivery across the industry. I’m just wondering, as you examine your own results, do you see a range of comps across the U.S.? Is it a divergent range? I know last quarter you talked about you’re really just not seeing it with the 11 major metro markets or kind of small, suburban markets in terms of trying to get a read for whether delivery of competitors is having an impact on you, or maybe you have an international market or two where you think that they’re further along in terms of competitive delivery set that you use as a proxy. I’m just wondering if you have any read or believe that that’s going to have any traction, or whether you’re just not seeing it at all?

So certainly If there's going to be an impact, it’s going to be in the major metro areas more than the smaller markets. And it’s going to be tough. As we understand the economics of some of these providers, their economics are certainly better in big cities than they are in smaller towns. So to the extent to which there's an effect, you’re certainly going to see it more in the major metros than somewhere else. We continue to track it very closely. If there is an effect from it, it's in the one point range. There's not certainly a big effect, but if there is, it is certainly going to be more in the major markets than in smaller markets. But it is still a limited effect.

And are there certain international markets that you talk to just for kind of intelligence, in terms of, we saw that a few years before you, and this is the progression of it, or is there really no specific market that you’d use as a proxy?

The market where it is most developed is China, and we’re doing great in China. And there was certainly a lot of discussion after the second quarter as to whether or not this was really about aggregators in the U.K. And I think you saw that third quarter was pretty darn good in the U.K. So I guess what I would say is we continue to monitor it very closely. There is not a significant effect. If there is, as I said, it's pretty limited. And in terms of the markets where it's more developed, our results in China are strong and our results in the U.K. are strong.

And then just, Patrick, in your prepared remarks, you mentioned briefly just the self-driving cars and your early testing and whatnot, but if you were to use your crystal ball -- I mean, maybe just share any early learnings? Or how far off in the future are we talking? It would just seem like it would be a huge labor savings from a franchisee’s perspective. But I’m just wondering, maybe this piece of this we just don’t fully understand, but any early learnings or time frame when you think that might actually take place would be great.

Well, the good news is that all we have to understand here at Domino's is how the customer is going to interact with that, and make sure that we are ready for it when it comes. The Ford and other people working on this -- and the government. As regulations develop, they’re going to be the ones who are going to be really determining when it rolls out at scale. Ford has talked about 2021 model year that they’re going to be delivering a significant number of these vehicles. I think you’re going to see adoption starting to really impact things somewhere between three years and ten years. And it's going to take time, and there are a lot of parties that are involved in that that are going to have a lot more control than this Ann Arbor-based pizza company. Our job is to make sure that we understand how we're going to be able to adapt it to the customer, and how it's going to play into our business, and how we can make sure that we’re going to be ahead of curve on this. And I guess the analogy I would make on this is voice. And when we rolled out voice on our app -- so natural voice ordering on our apps, now probably four years ago, something in that range, we talked about the fact that we thought this was important and that it was going to be an increasingly large part of our business going forward and how people were going to interact with technology. And we were out doing that ahead of everybody else and the first people taking commercial orders with natural voice. And you see now how that's played out. And our very developed abilities in that area have given us competitive advantage as natural voice is becoming more and more a part of how people interact with technology. So what I would say is three or four years ago as I was talking about natural voice, it was not clear exactly when that was going to start being widespread, but we were pretty confident that it would. We are equally confident that self-driving vehicles are going to have a material impact on transportation. And we've got to understand how we’re going to play in that space. And it's why we’re investing some resources against that and starting to understand how it’s going to affect our customers, how their behavior would need to change, et cetera. So the exact timing is going to be harder to predict and definitely not something that’s i-controlled or probably anything that any government agencies will be asking me about. But we are pretty confident it’s going to come and we've got to understand it and understand how we’re going to leverage it for competitive advantage when it does roll out.

And your next question comes from John Ivankoe with JPMorgan. Please go ahead.

Hopefully I'm not re-asking the same questions. I’ll try to ask it in a different way. The increase in the digital ordering fee from $0.17 to $0.21 to $0.25, are pretty small increases over a period of time. I mean, it's averaging just over $0.01 a year basically. So just put that into context as why the increase is so small? I guess in two different things. One, as you benchmark third party delivery orders or just third-party orders that are offered to competition, probably local competition, what is Domino's basically as a percentage of the average ticket relative to what your competitive peers are from what you can see in the independent markets? And then secondly, can you comment about your relatively small $0.04 increase about what we hear as one of your competitors that’s doubling the digital fee increase to its franchisees?

So thanks, John, and the answer is as a percentage of our ticket, we’re kind of in the range of 1 point. And I guess a bit over a point at $0.25, but it is still in that range of 1%. If you look at Grubhub, which is today the largest kind of straight order aggregator in the U.S., I think they have said that their average is about 15% right now. And so our approach to this is if you give our franchisees a 14% cost advantage, we're going to win on value. And we want to give them the best deal. We want to have the best technology. Topline growth in our business is going to be the best way to generate value for our shareholders over time. And we are very aligned with our franchisees about the approach that we’re taking to the business and how we’re going to create value for them and for our shareholders. And so doing this with moderate incremental increases allows our franchisees to maintain a real value advantage over people who are paying dramatically more. And we think that's important. And our approach to this is, I think, borne out in far better growth than pretty much everybody, and so that's kind of thinking that's going into it. Sure, we can always take it up more and have a quick bump out of that, but that's not our goal with technology. This is something that we are doing with our franchisees to create competitive advantage in the marketplace. And they are sharing in the cost of developing that.

And I guess your perspective is as we think about longer term in the model, even in the next five years, is just to expect these levels of very moderate increases. And that’s no step functions up, but just the overall theme is maintaining low cost operator advantage and winning for the topline. Is that fair to characterize?

I'm not going to get into projecting pricing going forward. But certainly we feel very good about our strategy and kind of how we’re approaching this. And this is an area where our scale allows us to spread our investments over a very big store base. It is an area where we can kind of leverage big investments that are being made centrally across a very large group of stores, domestically and around the world. And that's an advantage that we’re bringing to the marketplace for people who are part of the Domino's system. And so we feel really good about it.

Your next question comes from John Glass with Morgan Stanley. Please go ahead.

Thanks very much. 95 quarters ago, I was 116 quarters old. So you can do that math.

We have a winner!

Well played. Well played.

There you go. Two questions. First question is just UberEATS and McDonald’s did actually run fairly significant promotion during the quarter. Did you feel that all? Was there any evidence that that impacted your business?

I guess what I’d say, I’d repeat what I was before. If there is an effect and I’d say if there was an effect, you’re looking at it being relatively modest.

That's helpful. And then just on this technology fee increase. Jeff, maybe you can size this for us just so we can get the right numbers in the increases that U.S. or there’s some international markets. And it sounds like you’re going to be spending against it incrementally. So is it a net wash when you look at your business from a P&L or are you just recapturing some costs that you had already accumulated over time?

So as far as your model, we’re not going to give the actual dollar amount. What I can tell you is it’ll be all the stores in the U.S. times their digital orders times $0.04 more for the year. So you can kind of coalesce around that and try to get to a dollar amount, but we’re not going to give guidance specifically around that. As far as the incremental -- and don't forget we endeavored to increase the digital mix as well over time, right? So it’s incremental there too. But again, as Patrick said, this is done -- we have our innovation technology plan. We have the teams in place to deliver that value. That's a barge moving down the river, over time, every couple two, three years at least in the past we’ve raised the fee, again, to try to keep it very competitive and the best value in the industry which we believe we have. And so they’re not directly tied to each other kind of lockstep. And I won't comment as to whether it's a net zero or not.

Your next question comes from Alex Slagle of Jefferies. Please go ahead.

Could you talk about the domestic in-store execution and your satisfaction with your operator's ability to handle the big increase in volume going through your domestic stores? And it's been a number of years now of big growth. Have you come across any challenges keeping up with the production demands in terms of equipment, labor, and such?

Overall, they’re doing a terrific job. And so today our service levels to our customers are better than they have ever been. I would also give a shout out to our supply chain folks who have also needed to keep up with the volume growth. And that's why we’ve talked about kind of increased investments coming there and are needed. But overall, our stores are doing a really nice job of not only keeping up with it, but continuing to improve, the service, and I would add, it is part of why you’re seeing more stores being built. That's the other way of increasing capacity. And what you’re seeing over time -- if you look back at our sales growth three or four years ago, it was fundamentally 100% same-store sales growth and effectively flat store counts. You’re now seeing far more balance in how we’re growing our business overall. So you’re seeing now on a trailing 12-month basis something in the range of 4% growth coming from store count growth. And so I think it's important, as you look at the business and kind of analyze how you’re doing, how we’re doing, that you’re looking at overall retail sales growth along with kind of the straight up same-store sales growth, because clearly, one of the ways that our franchisees are maintaining or even improving service levels to our customers is by building more stores to handle that volume. So overall, they’re doing a terrific job, and one of the net effects of that is kind of continued growth in stores in the U.S. and around the world.

Your next question comes from Steven Anderson with Maxim Group. Please go ahead.

Yes, good morning. And I wanted to ask about the increase guidance to the $350 million, $355 million range. Is that inclusive of any potential share compensation, share-based compensation, or is that on a separate line?

So, Steven, this is Jeff. The updated guidance on G&A we gave is the GAAP number, the gross general administrative expense number. We’re raising it $350 million to $355 million for the full fiscal year. I know we’ve got a couple of months, two, three months to go here. And that would include all of the gross G&A costs, including corporate store advertising, performance-based compensation -- it includes all of that, so -- and continued investments, obviously most importantly in technology and analytics, to really help drive the business. So it's an all-in number.

There are no further questions at this time. I now turn the call back over to the presenters.

Thank you, everyone. We look forward to seeing many of you at our 2018 Investor Day in early January, and discussing our fourth quarter and year-end 2017 results on Tuesday, February 20. Thank you all.

This concludes today's conference call. You may now disconnect.