Domino's Pizza, Inc. (DPZ) Q1 2020 Earnings Report, Transcript and Summary

Ladies and gentlemen, thank you for standing by and welcome to the Domino's Pizza First Quarter 2020 Earning Conference Call. [Operator Instructions] I would now like to turn the conference over to your speaker today, Jeff Lawrence, Chief Financial Officer. Please go ahead, sir.

Thanks Sonia, and hello everyone. This is Jeff Lawrence, Chief Financial Officer of Domino's Pizza. Thank you for joining the call today to talk about the results of our first quarter of 2020. Given the unique circumstances created by the COVID-19 crisis throughout the world, in addition to discussing our first quarter results, we are also going to share with you some preliminary estimated results of the first few weeks of the second quarter. 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 throughout the call. If forward-looking statements are made today, I refer you to the Safe Harbor statement that you can find in this morning's release and the 10-Q. We will start with comments from Chief Executive Officer, Ritch Allison, followed by an update for me, then we'll go back to Ritch for closing remarks before taking analyst questions. We ask that our analysts limit themselves to one question during this call. With that I'd like to turn the call over to Ritch.

Thanks Jeff, and thanks to all of you for joining us this morning. Given the extraordinary circumstances, we are going to take a different approach to the call this morning. I'm going to speak first to share some perspective on the business and how we're responding to the COVID-19 crisis, both here in the U.S. and around the world. I'll then talk about some of the investments that we're making in our team members and in the communities that we serve. I'll then hand it over to Jeff, who will walk you through the details around our Q1 performance and Jeff will also share some preliminary estimated results from the first few weeks of our second quarter. I'll then come back to discuss some of the things that we're focused on as we look forward to the remainder of 2020 and then following that, as we always do, we'll be happy to take some of your questions. So with that as a roadmap for our call this morning, let's get started. And I'll begin with some perspectives on the business and how we're responding to this COVID-19 crisis. On 30th of March, we released a preliminary first quarter business update. We pride ourselves on being transparent with our stakeholders and we hope that information was helpful to you. So, I won't spend much time on Q1 in my comments this morning, as I've already shared some of my perspective on the quarter in that release. The reality is that the world is changing very rapidly and we are much more focused on the present and on how we're going to continue to navigate this crisis going forward. The restaurant industry is facing an existential crisis and no one knows how many restaurants will survive or what form the industry will take as this crisis eventually abates. We also don't know how consumer behaviors and purchasing patterns may evolve during and then after this COVID-19 crisis. We were fortunate to enter the year and this crisis in what we believe to be a very strong financial position, both at the brand and at the franchisee levels. Our U.S. franchisees averaged an estimated $143,000 in EBITDA per store and over $1 million in average EBITDA at the enterprise level in 2019. Both of those figures are increases over the 2018 levels. Now we know that profit levels vary significantly across the country based on wage levels and a number of other factors, but we're pleased that our franchisees remained healthy and strong throughout 2019. Looking forward here into 2020, we know our business, along with our franchisees and stores, will face new costs as we respond to COVID-19 with new service methods and a number of investments in items such as masks, gloves and thermometers both for corporate and franchisee team members. We are well positioned as a brand with the delivery and carryout business model and this has allowed us to continue serving our customers and employing our team members in the sizable majority of our markets and our stores around the world. As we manage through this challenge across the globe, I'm very proud as our CEO to say that we are leading with our values. Our first two values at Domino's are: number one, do the right thing and second, put our people first. And for us that means prioritizing the health and well-being of store team members, franchisees and the communities that we serve. During this extraordinary time, we take our responsibility for continuing to provide convenient, reliable delivery and carryout experiences to the communities where those services have been deemed essential. We take it very seriously. Fewer than 20 stores in our U.S. business are currently facing temporary closures. All others remain open and are serving customers. Now with that said, our U.S. business model has adapted to this new environment and our standard operating procedures have changed considerably over the last two months. I say to folks here inside Domino's, we're a 60-year-old brand that has rewritten most of our standard operating procedures in the last six weeks. We've moved to 100% contactless delivery model across the country. We have made our contactless drive up carryout technology available to all U.S. stores. We have temporarily banned customers from sitting and eating in our stores. We're asking our customers to practice social distancing when they visit us to pick up their carryout orders. We have implemented social distancing protocols in our store and supply chain for our team members there. And in addition to thermometers, we are supplying them with masks and gloves to protect our teams and our customers. At Domino's, food safety and cleanliness have always been top priorities, but recently we've devoted additional resources toward our efforts and our procedures there. I'm incredibly proud of our U.S. franchisees. They continue to embrace change at an unprecedented rate, but I'm also not surprised to see that they have elevated their commitment to safely serving their team members and their communities. It is at times like these when our U.S. franchisees truly shine brightest. All of our U.S. supply chain centers also remain open and are fully operational. Through the remarkable efforts of our supply chain team, we successfully opened our newest supply chain center in Columbia, South Carolina on March 29. We're working very closely with our suppliers to maintain a safe and stable flow of product into our stores. I'm so proud of our supply chain team. They've done it a just a tremendous job of continuing our core operations, while also responding to this crisis in new ways. They put significant effort into sourcing masks, gloves, thermometers, contactless delivery supplies and cleaning supplies at a time when these items are under just incredible demand pressures. In an effort to provide ongoing transparency to you in the midst of this crisis, this morning, we released our preliminary estimated U.S. sales results for the first four weeks of the second quarter. Sales have improved relative to the last two periods of the first quarter as detailed in our March 30 business update. And Jeff is going to share more details around this later this morning in our call. We continue to observe and analyze the rapidly-changing trends in consumer purchasing behavior. Across delivery and carryout service methods, dayparts days of the week, the U.S. will continue to be impacted by many factors such as shelter and place orders, business and school closings and event cancellations, which vary in magnitude across the cities and towns in the U.S. that we serve. Across our international business, the unique circumstances in a number of markets have necessitated the temporary closing of stores and in some cases, entire markets have temporarily closed for varying periods of time. We continue to stay in contact with the master franchisees operating these affected markets in stores. Some have already reopened and we look forward to them reopening the remainder of their stores as soon as possible. At our peak, we had almost 2,400 international stores closed. And as of April 21st, that number was approximately 1,750. This morning we also released our preliminary estimated international sales results for the first three weeks of the second quarter. The sales impact stemming from COVID-19 varies quite dramatically across our international markets. Some markets, where we have significant service method and operating hour restrictions, we have seen major declines in same-store sales. In other markets. We've seen strong recovery in steady gains in same-store sales over the recent weeks. China was our first market to be significantly impacted by COVID-19 and we are pleased to see our sales there recover and accelerate in the last few weeks of the first quarter and to remain strong early in Q2. I'm very proud of our international master franchisees and their resiliency as they manage through this crisis in their markets around the world. I'm also grateful for the best practice sharing and rapid adoption of new ideas across the globe. Much of what we're doing today, right here in the U.S. has been informed and inspired by our international markets that found themselves on the forefront - on the front end of this crisis. I'm going to turn our attention now to some of the investments that we're making in our teams and in our communities. Throughout this uncertain time, we are committed to supporting our teams and the communities we serve. In our corporate stores and supply chain centers, we are investing heavily in our teams during this crisis. We have committed to pay additional bonuses to our corporate store and supply chain hourly team members over a 10-week period from mid-March through at least the last pay period in May. We're also providing enhanced sick pay benefits to our hourly corporate store and supply chain team members through at least the remainder of the year. At Domino's, we don't want anyone to have to choose between their health and their pay check. Now most of you probably are not familiar with the Domino's Pizza Partners Foundation. It's a registered 501(c)(3) that was established to help Domino's team members in need during a time of crisis. Its mission is summed up in the phrase team members, helping team members. And its primary source of funding is through payroll deduction from corporate and franchisee employees. I'm very proud to say that our Company is making a significant donation to the Partners Foundation to help team members at this particular time of need across the globe. We're grateful as a brand that we're in a position to be able to make these investments and we are very proud of our independent franchise business owners, many of whom are making similar investments in their team members. Our supply chain centers, corporate stores and franchisees are also hiring and have been looking to add more than 10,000 employees across the U.S. With still many Americans newly unemployed, we feel privileged to be in a position to offer employment and a career opportunity within the Domino's Pizza system. We're also committed to supporting the communities around the U.S. where we live and work. We recently launched our Feed the Need program. This is in partnership with our franchisees to provide 10 million slices of pizza across the U.S. We're making a significant investment as a brand by supplying the food for this program, while our franchisees and corporate stores are being generous in providing the labor. We've empowered our franchisees in stores across the country to identify the needs specific in their communities. In some places, it's school children, who are no longer receiving free or reduced lunch. In others, it's hospital workers and first responders. In some places, it's essential workers in grocery and retail and many other areas. This isn't new because Domino's has always given back in times of crisis, this isn't an exception. While these are some highlights from the U.S., I would be remiss this morning if I didn't also thank our international master franchisees, many of whom are doing similar things in their markets. From the U.K. to India to Australia and really all over the world, the Domino's system is stepping up to support our communities. As a system, we are happy to make these investments in both our teams in our communities and will continue to search for ways to invest and to feed the need during this crisis. These investments are expected to be material during the second quarter. Jeff will comment on the financial impact of these investments in just a moment and we will provide more detail to you during our next earnings cycle in July. So, with that I'm going to hand it over to Jeff, who will walk you through the highlights of the first quarter and some preliminary estimated results from the first two weeks of - few weeks, excuse me, of Q2 and then I have to that I'll come back and share a few more thoughts with you before we move to Q&A. So Jeff, over to you.

Thank you, Ritch, and good morning again everyone. I'll cover off the first quarter financial results as well as provide a brief preliminary financial update for the business for the first few weeks of the second quarter. Starting with the first quarter results, we continue to lead the broader restaurant industry with 36 straight quarters of positive U.S. comparable sales and 105 consecutive quarters of positive international comps. We also continued to increase our global store count as we opened 178 gross new stores and 69 net new stores in Q1. This net store growth number includes the closure of the 71 stores, comprising our South Africa market during the quarter that was unrelated to the COVID-19 pandemic. Our diluted EPS in Q1 was $3.07, an increase of 39.5% over the prior year quarter, primarily resulting from a significantly lower effective tax rate and strong operational results. With that, let's take a closer look at the financial results for Q1. Global retail sales grew 4.4% as compared to the prior year quarter, pressured by a stronger dollar. When excluding the negative impact of foreign currency, global retail sales grew by 5.9%. This global retail sales growth was driven by both an increase in the average number of stores opened during the quarter and higher same-store sales. Same-store sales for the U.S. grew 1.6%, lapping a prior year increase of 3.9%. And same-store sales for our international business grew 1.5%, rolling over a prior year increase of 1.8%. Breaking down the U.S. comp, our franchise business was up 1.5%, while our Company-owned stores were up 3.9%. The U.S. comp this quarter was driven by ticket growth. We continue to see robust growth in our carryout business, while our delivery comp for Q1 was slightly negative, consistent with previously-discussed market dynamics. Our international comp for the quarter was driven entirely by order growth. We estimate that the international comp for the quarter was negatively impacted by approximately 1 point to 1.5 points by the COVID-19 pandemic. On the unit count front, we opened 30 net U.S. stores in the first quarter, consisting of 35 store openings and just five closures. Our international division added 39 net new stores during Q1, comprised of 143 store openings and 104 closures, including the closure of the 71 stores comprising our South Africa market. Turning to revenues. Total revenues for the first quarter were up 4.4% from the prior year, driven primarily by higher global retail sales, which drove higher supply chain and global franchise revenues. These increases were partially offset by lower Company-owned store revenues, resulting from the New York store sale in Q2 of 2019. International royalty revenues were pressured by $1.4 million during the quarter by foreign currency exchange rates. Moving now to operating margin. As a percentage of revenues, consolidated operating margin for the quarter increased to 39% from 38.6% in the prior year quarter and was positively impacted by the New York store sale and higher revenues from our global franchise business. Supply chain and Company-owned store operating margin percentages were relatively similar year-over-year. G&A expenses decreased approximately $1 million as compared to the prior year quarter. We continue to see the benefit of improved discipline and focus in this important area, while continuing to invest in strategic initiatives throughout our business. Our reported effective tax rate was negative 3.7% for the quarter, down 18.8 percentage points from the prior year quarter. The reported effective tax rate in the quarter included a 26 percentage point positive impact from tax benefits on equity-based compensation. We do expect to see continued volatility in our effective tax rate related to these tax benefits. When you add it all up, our first quarter net income was up $29 million or 31.2% over the prior year quarter. Our first quarter diluted EPS was $3.07 versus $2.20 in the prior year which was a 39.5% increase. Here is how that $0.87 increase breaks down for the quarter. Our lower effective tax rate, resulting primarily from higher tax benefits on equity-based compensation, positively impacted us by $0.58. Lower diluted share count, resulting primarily from share repurchases over the past 12 months, benefited us by $0.14. Higher net interest expense, resulting primarily from higher average debt balances, negatively impacted us by $0.08. And most importantly, our improved operating results benefited us by $0.23. Now turning to cash. During the first quarter, we generated net cash provided by operating activities of more than $95 million. After deducting for CapEx, we generated free cash flow of almost $78 million, which was pressured by normal balance sheet movement. During the first quarter, we repurchased and retired approximately 271,000 shares for $80 million or about $294 per share on average. It's important to note that these repurchases were made during the first week of the first quarter. All in all, a good quarter for the business in Q1. As we now move away from our Q1 financial discussions, I'd like to remind folks that we did issue a business update on March 30, which contain preliminary estimates of selected Q1 information, including comps, store growth and global retail sales information. We also inform the market that due to the uncertainty surrounding the global economy and our business operations, considering COVID-19, we withdrew our 2020 guidance measures related to G&A, CapEx, store food basket pricing and the impact of foreign currency on royalty revenues. We also announced that as a precautionary measure we borrowed the remaining funds available to us under our outstanding variable funding note to further strengthen our already strong financial position. I'd like to now switch gears and give a financial update on the business for the first few weeks of the second quarter for which we have available results. This information contains preliminary unaudited estimates and is being provided to assist our stakeholders with a high level understanding of how the business is performing during these extraordinary times. In the U.S. business, comps were up 7.1% during the first four weeks of Q2. U.S. retail sales were up 10.7% over the same time period. Sales trended up significantly over this four-week period. As it relates to U.S. customer behavior during this crisis, this is what we are generally seeing thus far. Delivery and carryout mix are holding relatively steady on average. Weekday sales have been significantly up, while weekends have generally been more pressured. Lunch and dinner dayparts are up, while late night had been more pressured. And we are seeing larger order sizes throughout the week. Again these are initial observations regarding consumer behavior and we may experience volatility in our sales going forward as a result of this dynamic environment. In our international business, comps were down 3.2% during the first three weeks of Q2. Important to note here that we are only reporting three weeks of international sales information due to the normal reporting lag in that business. To be very clear, the international same-store sales comp for the last two weeks of Q1 and the first three weeks of Q2 was negatively impacted by COVID-19. The negative impact primarily occurred from stores that had sales in a week, but we're were limited due to a service restriction, carryout and/or delivery and in some markets even dining restrictions, a part of the week temporary closure and/or a change in store hours. If a store was closed the entire week and had zero sales for that week however, it is not included in same-store sales definition or results. Moving on to retail sales for international. Retail sales, excluding FX were down 13.2% over the same time period, reflecting the many stores internationally that have been temporarily closed or have some other operating restriction, impacting sales. Turning now to our franchise partners. We have not provided widespread economic relief to our franchisees globally. While we acknowledge that this could change depending on the time period that this crisis persist and its overall impact on our results, we attribute our current situation to the underlying strength of our business model and the overall economics that our franchise partners have earned alongside of us over the past many years. The strength and resiliency of the Domino's brand has never been more evident. As Ritch discussed earlier, we are making significant investments in our team members and our communities during this time of crisis, including frontline bonuses, enhanced sick pay policies, community giving in partnership with our franchisees and investments in supply such as face coverings and gloves. We anticipate pressure on our Q2 earnings related to these investments of approximately $15 million. Based on trends we've seen to date, we also anticipate pressure on our Q2 earnings of an additional approximately $5 million related to lost revenues from our international franchise stores due to those temporary store closures. These are current estimates and are preliminary and could very likely change. We would also be remiss if we didn't comment on what we're seeing in the FX markets. If FX rates hold for the remainder of the year, we believe it could be a substantial headwind to 2020 cash flows and earnings of approximately $10 million. This current estimate is preliminary and could very likely change as foreign currency rates continue to fluctuate. Shifting now to cash and liquidity matters, we currently have more than $325 million in available cash and we note that our ongoing operations have provided positive net cash flow to the business during this crisis so far. Out of an abundance of caution, we have not repaid amounts on our variable funding notes and that cash is included in the available cash balance I just mentioned. We continue to invest in our strategic initiatives and we paid our shareholders our previously declared dividend on March 30. Additionally, earlier this week, our Board of Directors declared a $0.78 per share dividend to be paid on June 30. Separately, we have not repurchased any shares under our authorized share repurchase program since the first week of January. As a reminder, we currently have $327 million remaining under our Board authorization for future repurchases. In closing, we remain in good shape financially and we will continue to closely monitor all aspects of our business as we operate in these uncertain times. We will continue to focus on doing the right thing for our team members and our communities today, while ensuring that we not only survive, but are best positioned to thrive coming out of this crisis tomorrow. Thank you again for joining the call today and I'll turn it back over to Ritch.

Thank you, Jeff. I would now like to turn everyone's attention to our focus looking forward. Across the globe Domino's will remain steadfastly focused on the health and safety of our franchisees, team members and our customers. That is always priority one. We'll also remain focused on execution, service and value as we continue to navigate through these headwinds created by COVID-19. 2020 will continue to bring more uncertainty to the restaurant industry than any of us have ever experienced. And we do not have clear visibility into the duration and magnitude of the impact of this pandemic on our industry or our business and continue to assess each on an ongoing basis. We do expect that the sales impact will continue to vary greatly across the cities and communities in the U.S. and in our 90 markets around the world. Given general economic conditions, along with uncertain timing of the infection curve, the shelter and place orders, business interruptions, school and university closings and so many other factors make forecasting sales more difficult than ever. We do expect to see a significant impact on our store openings this year as construction and municipal permitting have slowed down dramatically during the crisis. We should have better visibility around unit growth in the months ahead. So given all of this, as noted in this morning's release, we are withdrawing our two to three year outlook for global retail sales growth, U.S. same-store sales growth, international same-store sales growth and global net unit growth. I want to be clear, do not mistake that as a lack of optimism about the Domino's brand and our business looking forward. I remain very optimistic about the long-term growth and success of our brand. There is just too much uncertainty in the current operating and economic environment for us to provide an outlook at this time. In this uncertain environment, you can rest assured that we are carefully managing our balance sheet, cash flow and all areas of the business to ensure that we are doing what we believe will help us best manage through the near-term and as always position ourselves for long-term success. We are committed as a brand and as a system to managing through COVID-19 and to emerging even stronger in the future. I have extraordinary confidence in our franchisees and in our teams around the world. There is simply no group of people that I would rather stand beside than the approximately 350,000 individuals that wear the Domino's logo. I am proud and I'm grateful to serve them each and every day. And now Jeff and I will be happy to take some of your questions.

[Operator Instructions] Our first question comes from Brian Bittner of Oppenheimer and Company. Your line is now open.

I know that there is a lot of moving pieces when we look at short windows on your comps. But your trends to start 2Q have clearly seen this measurable improvement versus 1Q and I appreciate the color that you gave, Jeff in your prepared remarks on what you're seeing from a day part perspective, etcetera. But can you unpack this recent improvement is a little more for us? What do you think has clearly changed recently that's driving the positive impact on your business? I know the underlying restaurant industry has gotten a little bit better than the last several weeks, but I just wouldn't expect there to be a huge factor for you guys. So, any additional color like maybe stimulus impacts or anything else that you can provide on recent trends will be helpful.

Brian, it's Ritch. Thanks for the question. Yes, I think there are several things that we're seeing in recent weeks. And again, it is a very dynamic situation that we're all living in. But certainly, I think some of the improvement results from the fact that there was a lot of pantry loading that consumers did as the pandemic really first started to come to the U.S. And I think as we've seen in some of our Asian markets in particular that were more on the front end of this. As time goes forward, people start to get a bit tired of cooking and eating the same thing, some of the pantry loading that they've done, it starts to bleed down a bit over time. I also think we, and I suspect the rest of the industry, probably are seeing some near-term impact here from some of the stimulus dollars that have gone out. So there are some factors that I would characterize as being more outside of our control, but then I think that there are some things that are inside of our control. And if you've taken a look at what we've done as a brand over the course of the last three or four weeks, we have pivoted very quickly to implement contactless delivery and carry out procedures across our system to protect our team members and also to give our customers confidence in the experience that they will have with us. We pivoted our advertising quite significantly to focus on those important cues, which are very important to customers right now to have a safe and pleasurable food experience for their families. So, Brian, I think a combination of some factors outside of our control, but I think also some things that we're doing here at Domino's as well.

And our next question comes from Matt DiFrisco of Guggenheim. Your line is now open.

Jeff, can you speak a little bit about those charges, I guess, or the $15 million and the $5 million. I just want to understand how you're coming about with those? The math would suggest about 1,700 stores or so. It's closer to 15%, but you're lower than 10% on that sales head. So is it correct to assume that you're expecting leads to continue to open and not be closed to the full quarter in that estimation? And then also the $15 million, I guess, can you just sort of bracket that? I want to better understand that in the new normal that these costs wouldn't necessarily be an ongoing quarterly charge that it's mostly front line stuff and the bonuses, not necessarily new investments that are required in what maybe investors might perceive as a new normal?

Yes. Thanks, Matt. I hope you're well and I appreciate the question. You know, the first thing I would just caution everyone on is we don't know what the new normal is going to be. The information that we shared with you today, it's preliminary, it's estimated and it's the best that we can give you right now. But we wanted to give you our best shot at what we're seeing kind of live. So I'll break it down in kind of the three big buckets that I talked about during my prepared remarks. The biggest bucket that we expect - again, we don't know yet, we're only four weeks into a 12-week quarter here so a lot build out to happen in an uncertain environment, is the $15 million related to do in the right thing for the safety and well-being of our team members, our customers and our communities. This is the 10 million slices of pizza, this is masks and gloves, this is bonus pay for our frontline team members in our stores and in our supply chain centers and it's just stuff that we're proud to be able to do and it's going to have a pretty significant impact and we're okay with that, it's the right thing to do. I'd then try and to get into the next bucket, which is the international business has been clearly impacted more on the whole than our singular market of the U.S. business, right. It's an average there, they are not new markets there. There are lots of different things going on, but as we look at the first four weeks in the quarter two and known that we have again eight weeks to go, our best guess is that we're going to take a haircut of about $5 million in royalties. It could be higher, it could be lower, it's preliminary, but it's super dynamic and that's what we're seeing today. The last thing we could argue it's COVID-related or maybe indirectly COVID-related, but it's just the impact of FX and that want to I gave you at least a preliminary view for the whole year, $10 million kind of year-over-year of a bad guy there, again preliminary, estimated, don't know if that's going to be the number. But when you add all three of those up, it's - as we look today, it's a $30 million headwind. Some of it within our control and we're proud to do, some of it kind of happened into us. So that's the best we can give you right now. We'll continue to assess whether we give any additional business updates between now and July. We're not promising anything today, but for sure you'll hear more detail from us in July and by then I'll tell you and Ritch will tell you exactly what happened for the four, 12 weeks of Q2.

And our next question comes from Chris O'Cull of Stifel. Your line is now open.

Ritch, does the Company still plan to launch a new product in 2020? And if so, is the timing changed at all?

Yes, we are still planning to launch new product in 2020. And still anticipating to do that in the summer time. Obviously managing through a different operating environment today as we were to make that happen, but we are still targeting summer for that launch.

And our next question comes from Sara Senatore of Bernstein. Your line is now open.

I wanted to follow up on the business patterns you're seeing in the stronger weekday versus weekend. I guess my interpretation is that you're benefiting on the weekdays from people being at home more, but maybe weekends perhaps lower incomes are something of a headwind when to spend. So I was just hoping you could help me contextualize this whether you're seeing anything across different income cohorts and may be talk about in the past, the resilience of your category to when income, well, it's a little tricky, because I know you are in the midst of a turnaround back in '09, but just trying to understand could - to parse out what role is sort of lower income playing versus more of the sort of stay at home, shelter and play? Thanks.

Sarah, it’s Ritch, thanks for the question. Yes, we are still assessing this literally day by day. As these is these patterns continue to evolve quite rapidly and Jeff highlighted some of them. Higher sales growth during the week than on the weekends. And I think a lot of that is driven by the fact that there are more families at home during the week, eating together. And then on by daypart, our late night business is down significantly, while lunch and dinner are much better. There just aren't evening gatherings of people or sporting events to watch and things like that. So, certainly those are having some impact. We haven't seen any discernible patterns across income categories as you asked, but interestingly enough, order sizes are up significantly and I think that's because more people are at home eating together, but also we're finding at Domino's and I think some of our peers in the restaurant industry are finding, people are ordering extra food to have leftovers around also, which is a really interesting dynamic in the market today. But it's really early Sara and one of the things about this COVID-19 phenomenon is at least for a period of time, I think it's appending a lot of the patterns that we have historically seen in our business and broadly across the restaurant industry. So we are watching it every day, every minute of every day and responding and adapting as we go.

And our next question comes from Alex Slagle of Jefferies. Your line is now open.

Just wanted to get your perspective on operations in the restaurants and discuss any potential issues with delays in delivery times or longer carryout turnaround times and inventory management stuff like that as demand's likely been a bit less predictable and more volatile.

Sure. I'm really proud Alex of our corporate stores and our franchisees who I think you've just done a tremendous job with their operations in responding to this crisis. As I mentioned earlier in my prepared remarks, we've taken 60 years worth of standard operating procedures and we've had to rewrite a good many of them in just the last six weeks around contactless delivery and carryout, no sitting down and dining in our stores, our drive up carryout feature, which we've now been rolling out aggressively across the country. And our franchisees and corporate stores have responded and done a terrific job even despite the more recent increases in sales, they've done a very good job of continuing to provide high levels of safe and responsive service out there to our customers.

And our next question comes from Nick Setyan of Wedbush Securities. Your line is now open.

You guys talked about obviously the near-term impact on unit openings. But could you maybe comment on the pipeline and medium to longer term what some of the chaos across the industry means or the domestic unit growth rates? We're already starting to hear much more favorable terms, better site selection and could that potentially mean a higher unit growth rate especially domestically in the medium to longer term for you guys?

Yes. Nick. So our unit growth here in the U.S. near term, it really is all about just the slowdown in construction and permitting in terms of the near-term slowdown in the openings. No fundamental changes as we look out over the medium to long term, in terms of the appetite of franchisees to open stores in the U.S. Stores over the medium and long-term are going to open based on strong unit level economics as they always have. Certainly, we are taking a look as we look out through the remainder of the year and into next, and trying to assess what incremental opportunities might be available because of some of the changing dynamics in the real estate market and whether or not that means some sites are - may become available that weren't before or also some opportunities potentially around how we think about lease extensions and rent opportunities going forward. It has been a pretty tight real estate market for a while now and we don't know exactly how much that's going to open up, but our guess is that it probably does open up a bit as we look out in the medium to long term.

And our next question comes from Peter Saleh of BTIG. Your line is now open.

I just wanted to ask about the pizza, I guess, landscape right now as you guys see it. I know 50% or so of the category is still run by many of the independents, while you guys are the leaders and you've been taking share. I'm sure to see if anecdotally at least that you guys are seeing any closures in some of the markets or some pressure on the independents, they feel like you're taking the share or do you feel like the pizza category in general is fairly healthy at this point and the sales of the sales lift that you're seeing is kind of being reflected across the entire category?

Yes, it is still really early to tell because we don't know. When we take a look across the restaurant landscape, there are a lot of restaurants out there that are not open right now. And we don't know how many of those honestly are temporary and how many of those will turn into permanent closures. And I tell you know, I did a lot of independent restaurants out there so I think the last thing any of us in the industry want to see is a lot of independent restaurant closures. We do - here at Domino's, we do believe that we are a pretty resilient brand. In a time like this, I think the positioning that we have as delivery and carryout player has certainly helped us in the early part of this crisis. And I think will continue to help us because I don't think consumers are going to snap right back to the old patterns and behaviors. I think the capability that we're building in contactless delivery and contactless carryout I think are going to continue to be important for many months to come, when we think about how this ultimately evolves. So as we think about the capabilities that we're putting in place today, it's not just to be competitive in the next couple of months. It really is to set ourselves up in what may end up being the new normal in our industry.

And our next question comes from Lauren Silberman of Credit Suisse. Your line is now open.

A point that you just made, you said contactless delivery will be something that will be available permanently. And then contactless delivery changed the economics of the delivery transaction or productivity and turnaround plans at all? Thank you.

So, yes Lauren, right now contactless delivery is the only type of delivery that we do in the U.S. We've actually made it mandatory across the country. And I do think that even at a point if we pull back on that and no longer mandate it, we are still going to offer it to the customer, because I think for some extended period of time, there is going to be some portion of the customer base that is going to want that contactless experience in delivery and/or in the carryout side of the business. As it relates to the economics around contactless, we have - we've just rolled out an innovation we call the Pizza Pedestal, which is a pretty simple cardboard pedestal so that our delivery experts don't put your pizza directly on the ground or on some other surface that we don't know if it's been cleaned or not. So there are some minor costs associated with things like that. In addition to the actual physical operation of contactless, I'm also incredibly proud of our technology and innovation teams who have rapidly moved to bring that contactless experience to the customers' handheld device or however they choose to order from us. And that includes some rapid innovation also to make tipping of our delivery experts easier and more prominent in the ordering experience, because the last thing that we want to see come out of this is any of our delivery experts to see a decline in income as customers move away from cash transactions and more toward digital and either credit or debit card transactions.

And then a question comes from Gregory Francfort of Bank of America. Your line is now open.

Just personal clarification, did you say China is running positively in recent weeks? I wasn't clear with I guess that description. And then in the U.S., are you seeing any differences regionally or urban versus suburban that are standing out in terms of how customers are using the brand or sales trends? Thanks.

Sure, Greg. So on China, we did see a pattern early on in the pandemic where China sales were pressured, but we have seen positive sales in China and improvement in the latter part of the first quarter and in here into the early weeks of the second quarter. And I got to tell you I am incredibly proud of our team in China. Much of what we are doing across our 17,000 store footprint was based on innovations around contactless delivery that our team in China brought forward. So really, really proud of not only their business performance, but also how they have contributed to our system. And then in terms of regional differences, the answer is yes. We've seen all kinds of differences and it really is based on how this pandemic has moved across the country with the pace of that movement and the severity of its impact in different places. If you turn the news on, we all see that there are certain places that have been significant hotspots for COVID-19. We've seen some places peak and start to level out, while others ramp up and most certainly those have impacted some of the trends in our business performance in those geographies. And it's still - as we sit here on 23rd April, it's still an evolving situation in many of the communities that we serve. There is also some very significant differences as I'm sure you all are aware, just in terms of how states and local municipalities have responded to the crisis and what restrictions they have put in place in terms of what business can be conducted and what customers can do in terms of travel and other things in those states.

And our next question comes from David Tarantino of Baird. Your line is now open.

I hope everyone is doing well. My question, Ritch, is on the international business. It's really kind of two parts to it. First is related to how they're managing through are the ones that are seeing large or widespread closures. How they're managing through that from a financial perspective? And do you see signs of strength or stress in the system related to that? And then secondly and relatedly is just the outlook for unit growth internationally with all the stress that appears to be occurring in the system, do you think we will see a moderation for time being as they work through this?

Yes, David, on the first part of your question. I think going into this, we are really fortunate to be in a place where we've got a significant amount of our international business there is managed by a publicly traded master franchisees who came into this crisis with very strong financial positions so - relative to perhaps some other brands' strong ability to weather a crisis like this. Now that said, most certainly, when - in a country, when you have to close all of your stores or close some substantial number or even in some places, as Jeff described, our stores are open, but with very limited trading hours, or very limited service methods, those do result in significant declines in retail sales for a period of time. Our master franchisees are doing all the things that you would expect them to do. They are prioritizing first and foremost the safety of their team members and their customers, but they are also taking the appropriate steps to manage cash appropriately and to manage - make sure that they're being mindful of the liquidity in their operations. They are also working really hard to get those stores reopened and we've already seen a couple of large international markets. Spain and France would be two where we were completely closed for a period of time, but have begun to reopen stores in each of those countries. We are staying very actively in touch with those international master franchisees and talking with them daily about their financial position. And we'll continue to do so as we work together through the course of this crisis. The second part of your question around unit growth most certainly in the near term, we will see an impact on unit growth. Much as I described in the U.S., where there are construction delays and there are permitting delays, the same holds true in many of the international markets. And then certainly in some of those markets that have been under more pressure, where we've had a significant number of store closures or the entire market shuttered, certainly that results in some near-term slowdown in store growth there. But over the long term, I come back to what I always talk about with you is that the unit economics will ultimately drive the store growth over time. And as we come out of this COVID-19 crisis which, I believe we will do with a very healthy brand around the world, my expectation is that we still have a significant opportunity to grow our brand footprint across the globe. As you know, we've got a lot of share growth opportunity outside the U.S., and we've got well capitalized and well managed master franchisees who are going to be eager to get back after that as this subsides.

And our next question comes from James Rutherford of Stephens & Company. Your line is now open.

Yes, thanks for taking the question. Just one from me. I'm curious, Jeff if you can share how much of the U.S. sales mix prior to COVID-19 was related to large group orders for parties have been meetings and the like and I ask that because I assume those occasions have gone down dramatically, which makes the improvement in your other kinds of orders, more impressive to drive that 7% comp here in the first four weeks of the second quarter?

Yes, James. Thanks for the question. We're trying to be as transparent as we can and I've given you guide, the peek into the consumer behavior at least during the first four weeks of Q2 here, but the insights aren't anymore fancies and kind of related out already. You can imagine that people that used to get around television to watch your favorite sporting event, those orders aren't there. If you are ordering in your sheltered in home with your family, those orders are larger, because you might be looking for some leftovers for the next couple of days. If you had an occasion that you'd buy pizza for the folks that you work with in an office building, those occasions are gone. So it's - it really is no more complicated than that, although I will still tell you it is early in this crisis. We just don't know how that consumer behavior will ebb and flow as we continue through this and get out of this. But what I can tell you as Ritch just alluded to is, we believe that the global pizza industry is super resilient. People are going to want to eat Pizza before, during and after this crisis. And there is no one better positioned with our franchise partners around the world to hopefully fill that demand than we do. So, we'll be there for all the occasions. We'll continue to more of our standard operating procedures as Ritch talked about to make sure that we give the consumers what they want now and in the future. Again being vertically integrated in tech, having real innovative business partners around the world give us a huge advantage versus a lot of the other competitors in the industry. So, we feel like if anybody can get it done, we can get it done and we're going to continue to put our customers first, our team members safe in all that we do.

And our next question comes from John Glass of Morgan Stanley. Your line is now open.

How many of the customer visits you're seeing recently are coming from new customers or lapsed users? And what are you doing to maybe capitalize on that opportunity to get new customers? Are you incenting them to sign up in the loyalty program in a different way and maybe any metrics around that loyalty growth during this period of time would be helpful? Thanks.

Sure, John. We absolutely are seeing an uptick in new customers, and I'll talk about it on a couple of dimensions. You know, I am sure you know that we are seeing some folks trying us for the first time or trying us again just given the availability of restaurants and food types out there. We're getting, a shot with some customers that may be weren't doing business with us before. Also what we're seeing is we are getting new digital customers as well. The digital percentage of our business has ticked up pretty significantly in the last several weeks. I think I reported to you, for the fourth quarter, we touched 70% digital in recent weeks, we're running at 75%. And we've had at least one week where we were over 80% digital. So, that's also another benefit we're seeing is that customers are coming to that digital channel as we go into this contactless space that we're in. And we are absolutely actively working to - for that - we got the first order from that customer to get the second digital order and for those customers that are ordering digitally, actively working to migrate them to our Piece of the Pie Rewards loyalty platform as well. So, it's still early john. But certainly, we are seeing some opportunities with customers that we didn't have in the previous couple of months, leading up to COVID-19.

And our next question comes from Chris Carril of RBC Capital Markets. Your line is now open.

I wanted to ask about aggregators and specifically any updated thoughts on how the current environment will shift the competitive dynamic in delivery? So with the rising demand for off-premise here, is there any more opportunity for Domino's to highlight its value positioning, especially in a more pressured macro environment?

Sure, Chris. Well, one thing I could tell you is in the current environment we're operating in I am so glad that we are not on these aggregator platforms as Domino's. When I think about what matters to our customers, the trust and knowing how that food, where it was prepared and who delivered it to them. It certainly comforts me needs to know that it is our uniformed and trained Domino's delivery experts that are bringing the food to the door in a time like this. I'm also very glad that we've made the decision over time to continue to own that customer relationship on the front end, particularly now that we're talking about 70 - run rate of 75% plus digital. We think even more than ever that it is critical for us to continue to own that digital relationship with the customer as well. That said, certainly in the current environment with virtually all restaurants closed to dine in, there are lots and lots of customers that are trying delivery for the first time, and many of them through the aggregators. So this is going to be a very dynamic environment as we look over the months ahead. And ultimately to all learn what ultimately sticks in terms of these changes in customer behavior because my guess is customers don't immediately go back to what they were doing before. In that environment, we're staying focused on the things that we know are so important to the business for the long term, on value, staying very focused on value, staying committed to our delivery and our carryout value offers. We're also remaining very focused on service. One of the things that is happening right now across the Domino's U.S. business is the very aggressive hiring of additional delivery experts. The labor market has been incredibly tight for a couple of years. As that has loosened up in recent weeks, we've just sensed announcing our effort to hire 10,000 team members in the U.S. - our corporate store business has hired 100 people in that limited period of time. And that is really a key element of how we continue to provide great service to our customers during this time. And then staying out on the forefront of safety through all of these contactless methods through the enhanced cleaning of our stores, we've changed from operational audits to safety awareness, visits during this time. So, we believe all of those actions will continue to position us well as we move forward through this crisis and into the time period beyond.

And our next question comes from Katherine Fogertey of Goldman Sachs. Your line is now open.

I mean if you can comment, you mentioned a little bit about the 10,000 delivery expert hiring, if you could give a number of how many the whole system has hired and if you've seen any change in turnover either positive or negative at the stores given the current environment. And on that point wanted to get your thoughts on how you view your benefit package and the fact that you employ your drivers with a competitive advantage vis-à-vis the aggregators? Thank you.

Sure. Katy. So on the 10,000 folks that we're trying to hire across the system, we don't have perfect visibility into our franchisee hiring, because that really is their job, their team members to hire and to train. But what I can tell you from the conversations that we have is that the applicant volume has increased significantly since we began that effort. And unfortunately we just saw the another 4.5 million file for unemployment this morning. Unfortunately, there are a lot of people out there that are out of work right now. And I am certain that that is contributing to the increased applicant flow that's coming into our stores. As I think about what our value proposition is relative to someone working in the gig economy. I think now in an environment where so many people are losing their jobs having a set schedule and having a job getting a W-2 from Domino's or from one of the Domino's franchisees I think is probably valued probably more than it has been in quite a long time. We've tried to make a very strong commitment to our corporate store team members that's drivers and everybody in the store with enhanced bonuses over a 10-week period as folks worked through this crisis we've been have enhanced our sick pay benefits during that time as well. So, we are also looking for opportunities here in the near term, but then also over the long term to continue to make that a very attractive employment opportunity. And then finally, we've talked about it so many times. Well over 90% of our U.S. franchisees started off as delivery drivers or folks working inside the stores and that's a career opportunity that is out there that just isn't available and the gig economy.

And then just my question around turnover. Are you seeing turnover so up, be flat or go down in the stores? Maybe if you can just comment on the Company's stores here.

Katy, we haven't seen any major shifts in turnover. It's still a really short period of time that we've been in this crisis. So, we'll probably know more in the months ahead as things continue to unfold there.

And our next question comes from Alton Stump of Longbow Research. Your line is now open.

Thank you most of my questions have been asked, but just sort of just going to follow up on last couple of your answers Ritch. Is there an opportunity on the labor cost front for savings? You've given the fact that there are obviously, to your point, an awful lot of people especially in the restaurant industry that are looking for work currently. Is that an opportunity potentially for you guys and/or your franchisees to kind of bring the average cost down a little bit on labor front?

Alton, it's Ritch. We're going to ask you to - your line was breaking up a little bit. If you could just slow down just a little bit and repeat that question. We just want to make sure I think Jeff and I heard about 60% of it.

Okay, sorry about that. I was just asking if there is an opportunity kind of labor cost front to save money given the fact that there obviously are a lot of people at your point, especially in the restaurant industry that are looking for work currently?

Yes, Alton, thanks for repeating that. You know I want to be very clear and we want to be very clear that this crisis is not a time to lower the rates that we pay our valuable team members, and we don't think that way, our franchisees don't think that way. If anything we want to employ more people and as Ritch mentioned, we're paying a bonuses, we're paying them more. You know I'm a finance guy, I would think about efficiencies and things like that, but right now, quite frankly, it's not about that. For us it's about continuing to run as an essential service taking a very seriously hiring more people paying them more actually right now, giving people more jobs, that's really what we're focused on. We're proud of all of the small role that we are playing, keeping people employed and FAD. And we'll leave it for another data to get efficient on any kind of labor rate stuff.

Thank you. And our next question comes from John Ivankoe of JPMorgan, your line now open. And John Ivankoe, if your line is on mute, please unmute. And again our next question comes from John Ivankoe of JPMorgan. Our next question comes from Jon Tower of Wells Fargo. Your line is now open.

Great hope, you can hear me okay. Just a couple of quick ones from me. Ad budgets are down across the restaurant space as a whole, but also all the advertising dollars seem to be pivoting towards this off-premise or delivery channel. So can you talk about how you're managing through communicating to consumers that you're valued there that and frankly breaking through to consumers in this time when everybody seems to be focused on this one channel? And then just pivoting to the U.S. unit growth. I'm curious if you could talk about - you mentioned the health of the franchise community is very strong coming into this crisis. And we're taking a pause, right now, but is there any reason to believe that you can't ramp growth faster on the back end, particularly rents are going to be lower and/or you see some independent store closures at the end of this whole crisis? Thank you.

Thanks, Jon. On your first question around the advertising spend out there in the market. We look at a couple of things around that as we think about it. One is we view it absolutely as a time to continue to lean in hard on getting our voice out there. So, we're not pulling back one bit on advertising during this. And frankly, one of the things as you look broadly across not just restaurants, but across all of the folks out there that spend a lot of money on advertising, there's been a heavy demand out there for a lot of the same customers that we want to reach. And therefore GRP delivery has been little spotty out there in the marketplace over the course of the last couple of years. We expect that we may see some benefit in that and just getting the full delivery of the GRPs that we want to buy anyway. And then as it relates to share of voice within the category, most certainly all of the spend out there wallets, some of it's come down overall. It really is focused on this - on the delivery channel. We've just got to continue to invest against it. We've got to continue to talk about value, to talk about service, to talk about safely serving our customers. And I am really proud of our advertising team. I mean they have pivoted so quickly. And if you look back over the last six weeks or so they produced about an ad a week. Normally we go through a much more prolonged cycle to produce advertising. So we're trying to stay very nimble and we've just got a terrific team that is that's making that happen for us. And then your second part of your question was around U.S. unit growth. We're certainly assessing what the back end of the crisis opportunity might be. Ultimately as I talk about all the time, the unit growth is going to be driven by the cash on cash returns at the unit level and how our franchisees view the economics. I can tell you that for our corporate store business, I would love to accelerate and go even faster. And if there are opportunities to do that, we are most certainly going to.

And our next question comes from John Ivankoe of JPMorgan. Your line is now open.

Okay, first a clarification and then a follow-up on the theme we've been talking about. First, you mentioned increased transaction size a number of different times. I mean can you comment on same-store transactions and delivery same-store transactions and carryout. I mean it does sound like we got some outsize ticket gain, just wanted to see what was happening in terms of transaction count.

Yes, John. So again, very early, very dynamic, but as we look as we looked at period for the increase that we reported the 7.1% for the entire U.S. system, that's more ticket certainly than it was orders. But the important thing to remember here in this new environment is that the ticket part of the overall comp includes way more food now in the same order. So, when you think about - an order used to be in order, well now in orders kind of more than an order because people are - people looking to put some stuff in their zip lock bag. So again, early we're giving you as much as we can, trying to be as transparent as we can. But it's larger orders is what we're seeing so far and we're happy to get that to you in a safe contactless way.

Yes, definitely and it would make sense to amortize some delivery fees as well so that would make sense from many different perspectives. And then secondly we have, I guess, the economic situation that many of us would have never anticipated where a number of people will make more money on unemployment for four months being at home than they would actually working in a lot of different cases. So I wanted to ask this from here from two perspectives. One, if you are seeing kind of a pickup from a consumer perspective and maybe the type of consumer that would be benefiting economically from a weekly basis of basically not working versus working? And then secondly, if there is a way to comment on it appropriately, has that influenced or do you think it might influence on the margin your ability to attract employees that what you might offer them might not be equivalent to their state plus federal unemployment benefits?

John, it's Ritch. On the first part of the question, really too early and would be hard to tell. I suspect that the stimulus that was just released out there is probably having more impact than the unemployment benefits thus far. Yes, that you just described in terms of money going into consumers' pockets, which they could choose to spend with us or with others. And then the second part of your question around does it make it harder to hire folks? We tried to lean into that a bit. As we mentioned a couple of times earlier for 10 weeks in our corporate stores and in our supply chain business, we've got bonuses for our hourly team members and also for our store managers as well. And we've done that first and foremost to say thank you to them for continuing to serve our customers in what is a relatively crazy time. But also we recognize that we've got to continue to earn their loyalty to work for us as there are other alternatives potentially out there as you described. So haven't seen any, pullback there. And as I mentioned earlier, we've actually seen a very significant increase in applicant flow because even with those near-term unemployment benefits, I think a lot of folks are looking beyond that into August and September. The months beyond the expiration of those benefits and I think I want to make sure that they've got a job, when they get to that point in time.

It definitely makes sense, Ritch and maybe as a couple of quarters ago, maybe the second quarter of '19, we talked about delivery service times and just overall delivery metrics. I think you touched on it a number of different times this call, but on an apples-to-apples basis, where are we in terms of delivery metrics at this point time to household order accuracy just the things that are not necessarily health and safety-related, but just the call it the old fashioned core of the way you guys used to measure yourself?

Sure. So yes, John, as I've mentioned before, we didn't get a lot better from '17 to '19 on delivery times, but started to see some improvement there. And particularly I'm really proud of our corporate store business, where we've seen a good bit of improvement with a lot of focus around delivery times and look we've got some franchisees out there that are averaging every week under 20 minutes delivery time. So there are a lot of really strong proof points out there across our system. The data, like the data in every other aspect of our business, can be pretty choppy here with - in this COVID-19 time. And a lot of that gets driven by the fact that we see these shifts across days and across dayparts when we and a lot of our franchisees are still working really hard to figure out those new patterns and make sure we've got delivery driver schedules balanced appropriately against them. So, what I can tell you is the system is very focused on service. We're making some improvements there and we are bringing safety to the forefront does not - it does not mean that we're not also focused on those service times because we do know that's going to be a critical way that we'll continue to grow our business and compete against the aggregators.

Thank you. And our next question comes from Jeffrey Bernstein of Barclays. Your line is now open.

Ritch, you talked about in your prepared remarks the independents and the existential crisis the industry is facing and obviously the impact of the future. So it seems like you would have good insights into more the independent side of things and each of your franchisees. In many ways is more of a mom and pop, but your comps are clearly solidly positive. So I was wondering how you think about the independents survival with comps down significantly, whether it's within pizza or just thinking more broadly as a restaurant CEO, the ability for them to keep their doors open for an extended period and kind of survival whether that would help the industry supply-demand imbalance that people have been talking about for years? Any thoughts on kind of the broader industry and the independents' ability to survive would be great.

Yes Jeff, I'll stay fairly brief on that. Restaurant business is a tough business and there are a lot of restaurants out there that were struggling even before this crisis got here as labor rates have increased significantly across the country. And so, I think there is a lot of pain in the industry right now as folks - a number of independents came into it, not particularly strong going in, but now being faced with this existential crisis. So, certainly as someone who has been in the restaurant industry for a long time and someone who loves to eat out, I sure hope independents to survive because the - I think all of us here want to be able to go to an independent restaurant. We want to be able to go to a Domino's Pizza, we want to be able to go to an independent restaurant as well.

And our next question comes from Andrew Charles of Cowen. Your line is now open.

Most of my questions have been asked, but Ritch, I totally understand the fluidity of upcoming development that leads you to suspend the two to three year outlook. But just to be clear, is the target for 25,000 global locations by 2025 still on the table, just given your continued optimism on the long term and the potential for the unit developments you've made up kind of past the next two to three years?

Yes, Andrew. Thank you for asking that question. Absolutely, I still have great optimism around our 25,000 store target. The brand came into this crisis in a very healthy place with strong growth momentum. We're going to work our way through this, but I still have a ton of optimism about the long-term health and growth of Domino's Pizza.

Thank you. And ladies and gentlemen, this does conclude our question-and-answer session. I would now like to turn the call back over to Ritch Allison for any closing remarks.

Thank you. Thanks everyone for joining us on the call this morning. It's an incredibly dynamic time in our business and across the industry, but if I could leave you with one thing this morning, it is that I, and our management team and our franchisees at Domino's Pizza have a great deal of optimism around the future of our brand. One of the things that I've had a front-row seat to for the last six weeks or so is the incredible resiliency, the incredible innovative spirit, the hustle the passion of our Domino's Pizza franchisees and team members around the world. So while a difficult time for all of us, I sit here today never more optimistic about this great brand. So, again appreciate you being with us. And Jeff and I look forward to speaking with you in July as we will then discuss our second quarter 2020 results.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.