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DPZ Dominos Investor Day 2018
DPZ Dominos Investor Day 2018
INDUSTRY
DISRUPTION
INVESTOR DAY
JAN. 10, 2018
ORLANDO, FL
Tim McIntyre
EVP, Communication & Investor Relations
LEGAL STUFF
This presentation and our accompanying comments include “forward-looking statements.”
These statements may relate to future events or our future financial performance and are subject to known and unknown
risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to
differ materially from those expressed or implied by these forward-looking statements. This presentation and our
accompanying comments do not purport to identify the risks inherent in an investment in Domino’s Pizza and factors that
could cause actual results to differ materially from those expressed or implied in the forward-looking statements. These
risks include but are not limited to those risk factors identified in Domino’s Pizza, Inc.’s Annual Report on Form 10-K for
the fiscal year ended January 1, 2017, as well as other SEC reports filed by Domino’s Pizza, Inc. from time to time.
Although we believe that the expectations reflected in the forward-looking statements are based upon reasonable
estimates and assumptions, we cannot guarantee future results, levels of activity, performance or achievements. We
caution you not to place undue reliance on forward-looking statements, which reflect our estimates and assumptions and
speak only as of the date of this presentation and you should not rely on such statements as representing the views of
the Company as of any subsequent date. We undertake no obligation to update the forward-looking statements to reflect
subsequent events or circumstances. In light of the above, you are urged to review the disclosures contained in the
Domino’s Pizza, Inc. SEC reports, including the risk factors contained therein.
This presentation contains trade names, trademarks and service marks of other companies. We do not intend our use or
display of other parties’ trade names, trademarks and service marks to imply a relationship with, or endorsement or
sponsorship of, these other parties.
PAGE 3
Patrick Doyle
CHIEF EXECUTIVE OFFICER
“DISRUPTORS”
PAGE 5
DPZ
In our industry,
DPZ has always been a disruptor
PAGE 6
DPZ
PAGE 7
DPZ
PAGE 8
DOMINO’S IS #1 IN U.S. DOLLAR SHARE
14%
12%
10%
8%
6%
Next nearest competitor: 13.9%
4%
2%
0%
Q4
Q1
Q1
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q2
Q3
Q4
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Source: The NPD Group/CREST® through quarter ending September 2017 PAGE 9
U.S. GROWTH CONTINUES TO BE BEST IN CLASS
Top 10 QSR Brands Average Same Store Sales
2010-Q3 2017
9.0%
8.0%
7.0%
6.0%
5.0%
4.0%
3.0%
2.0%
1.0%
0.0%
-1.0%
-2.0%
30%
29.9%
25%
20%
15%
10%
Q2
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Source: The NPD Group/CREST® through quarter ending September 2017 PAGE 11
OUR INTERNATIONAL SHARE IS GROWING
DPI Total Pizza Market Share
2015 2016
5.6% 6.4%
PAGE 13
FIRST PRIORITY
PAGE 14
SECOND PRIORITY
PAGE 15
CARRYOUT MUCH BIGGER THAN DELIVERY
Pizza Occasions
3,000,000,000
2,500,000,000
2,000,000,000
1,500,000,000
1,000,000,000
500,000,000
-
YE Sep '12 YE Sep '13 YE Sep '14 YE Sep '15 YE Sep '16 YE Sep '17
Pizza Delivery Pizza CO/DT
12%
10%
8%
6%
0%
Q2
Q3
Q3
Q1
Q2
Q3
Q4
Q1
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q4
Q1
Q2
Q3
Q4
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Source: The NPD Group/CREST® through quarter ending September 2017 PAGE 17
Includes carryout and drive-thru
STORE GROWTH KEY IN CARRYOUT OPPORTUNITY
PAGE 18
FOCUS: DRIVING SALES FROM 2 DIFFERENT SOURCES
Domino’s International Retail Sales Growth
18.0% 17.1% 16.8%
9.3%
16.2%
16.0% 10.6%
14.7% 12.2%
13.9%
14.0% 13.4% 7.8%
12.6% 7.7%
6.7%
12.0% 7.4%
10.0%
Sales from New Stores
8.0% Same Store Sales
6.0%
4.0% 7.8%
6.8% 6.9%
6.2% 6.3%
5.2%
2.0% 4.0%
0.0%
2011 2012 2013 2014 2015 2016 2017 Q3 YTD
Note: 2015 excludes impact of the 53rd week; Constant dollar basis to exclude FX impact PAGE 19
FOCUS: DRIVING SALES FROM 2 DIFFERENT SOURCES
Domino’s Domestic Retail Sales Growth
16.0%
14.2%
14.0% 2.2%
13.5%
3.0% 12.7%
12.0% 3.3%
10.0% 9.2%
1.7%
8.0% Sales from New Stores
0.0%
2011 2012 2013 2014 2015 2016 2017 Q3 YTD
PAGE 21
DATA DRIVES EVERYTHING
PAGE 22
DPZ
WE DON’T INVEST
LIKE OTHER BRANDS
PAGE 23
WHAT DOES THAT MEAN?
PAGE 24
TYPICAL BUDGET PROCESS
PAGE 25
OUR APPROACH
PAGE 26
OUR APPROACH
PAGE 27
OUR APPROACH
PAGE 28
OUR FRANCHISEES’ APPROACH
PAGE 29
WE’RE #1 – BUT WE’RE NOT FINISHED!
Next Goal:
Dominant #1
within the
next decade
Ritch Allison
PRESIDENT, DOMINO’S INTERNATIONAL
WE’RE #1 – BUT WE’RE NOT FINISHED
PAGE 32
DOMINANT #1 – WHY IS THAT IMPORTANT?
Scale Matters
Supply Chain
Advertising
Talent
Technology
Service
DOMINANT #1 CREATES A VIRTUOUS CYCLE
PAGE 34
DOMINANT #1 – HOW DO WE GET THERE?
DOMINANT #1 STARTS WITH A SOLID FOUNDATION,
BUILT OVER THE LAST TEN YEARS
Single POS system
PAGE 36
DOMINANT #1 REQUIRES CONTINUOUS FOCUS AND
INVESTMENT ACROSS KEY AREAS IN THE BUSINESS
Of course, it all starts with the best food
Leading, innovative technology
World-class supply chain system
Best-looking, best-operating stores anywhere
Strong franchisees that want to grow
Fortressed markets
PAGE 37
THE BEST FOOD IN THE INDUSTRY:
INNOVATION NEVER STOPS
PAGE 38
LEADING, INNOVATIVE TECHNOLOGY: WE BEGAN BY
MANDATING A SINGLE POS SYSTEM IN THE U.S.
PAGE 40
LEADING, INNOVATIVE TECHNOLOGY:
PIECE OF THE PIE LAUNCHED IN 2015
PAGE 42
LEADING, INNOVATIVE TECHNOLOGY:
A GLOBAL SYSTEM OF INNOVATORS
PAGE 43
WORLD CLASS SUPPLY CHAIN:
INVESTING HEAVILY TO SUPPORT SYSTEM GROWTH
PAGE 44
BEST LOOKING, BEST OPERATING STORES:
MAJORITY OF OUR GLOBAL SYSTEM REIMAGED
2017 2020
PAGE 45
STRONG FRANCHISEES THAT WANT TO GROW:
WE HAVE REALIGNED THE FRANCHISEE BASE
PAGE 46
FORTRESSED MARKETS:
FRANCHISEES INVESTING HEAVILY
PAGE 47
FORTRESSED MARKETS:
THE SEATTLE STORY
$25,000
$20,000
$20.7K
$15,000 $14.1K
$10,000 $12.9K
$5,000
$-
2017
2010 2011 2012 2013 2014 2015 2016
through Q3
Fran National AWUS $12,916 $13,391 $13,840 $14,604 $15,748 $17,706 $19,492 $20,724
Seattle AWUS $14,109 $14,782 $15,488 $17,031 $18,772 $22,056 $25,098 $26,303
$60,000
$40,000 $49.9K
$20,000
$0
2010 2011 2012 2013 2014 2015 2016
Fran Unit Profitability $67,000 $70,000 $75,000 $82,000 $89,000 $126,000 $133,000
Seattle Unit Profitability $49,960 $67,218 $67,256 $79,449 $102,978 $141,311 $158,392
24.2%
21.4%
18.0%
15.9%
14.2% 9.8%
12.4%
11.3%
10.3%
Dominant #1
within the
next decade
Russell Weiner
PRESIDENT, DOMINO’S USA
THE ROAD TO #1 IN THE US WAS FILLED WITH
MAJOR CONSUMER FACING INNOVATION
14%
12%
10%
8%
6%
4%
2%
0%
Q4
Q4
Q3
Q1
Q2
Q3
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q4
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Source: The NPD Group/CREST® through quarter ending September 2017 PAGE 53
BEHIND THE SCENES, THIS INNOVATION AND GROWTH
WAS FUELED BY A RELIANCE ON DATA INSIGHTS
PAGE 55
WE IDENTIFIED CARRYOUT AS AN OPPORTUNITY AND FOUND
A MORE PROFITABLE ENTRY THROUGH OUR OFFER TESTING
PAGE 56
CARRYOUT SHARE HAS ALMOST DOUBLED SINCE OUR
CARRYOUT DEAL LAUNCHED IN MAY 2011
NPD QSR Pizza Carryout Dollar Share
16%
14.4%
14%
12%
10%
7.6%
8%
6%
4%
2%
0%
Q2
Q3
Q3
Q1
Q2
Q3
Q4
Q1
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q4
Q1
Q2
Q3
Q4
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
50
U.S. store projection 0
from that model: -50
~6,200 units -100
-150
-200
Q2 14 - Q3 14 - Q4 14 - Q2 15 - Q3 15 - Q4 15 - Q2 16 - Q3 16 - Q4 16 -
2014 2015 2016
Q1 15 Q2 15 Q3 15 Q1 16 Q2 16 Q3 16 Q1 17 Q2 17 Q3 17
Domino's 81 93 96 96 133 132 147 161 171 183 193 218
Pizza Hut 17 6 1 -34 -110 -131 -113 -137 -133 -134 -180 -147
Papa John's 54 60 60 48 48 49 56 50 53 38 26 30
10.0% 9.2%
1.7%
8.0% Sales from New Stores
0.0%
2011 2012 2013 2014 2015 2016 2017 Q3 YTD
8,000+
stores in the U.S.
PAGE 66
A BETTER DELIVERY NETWORK REQUIRES MORE THAN
JUST MORE STORES
PAGE 67
OTHERS ARE TRYING TO GET INTO DELIVERY, BUT THE
ECONOMIC MODEL IS NOT OPTIMIZED FOR ALL PARTIES
Delivery is hard…and expensive
Receipt from Uber Eats in Portland Oregon (Pearl District), Halloween night (5:45pm). PAGE 70
WE’RE BUILDING A SUSTAINABLE, VIRTUOUS CYCLE
THAT WILL DRIVE DELIVERY & CARRYOUT DOMINANCE
Better
Insulated from
positioned for
delivery
Carryout
competitors
Opportunity
Increased
store-level
Build Stores profits;
to fortress
markets
‘Easier to run’
stores
Improved Higher
Delivery Customer
Network Satisfaction
PAGE 71
THIS MODEL IS ALREADY WORKING FOR DOMINO’S
IN GLOBAL MARKETS
Australia opening stores with average of 8,000 households and 6-minute drive
times
Iceland opened their 23rd store in a country with only 334,000 people!
PAGE 72
DOMINO’S WAS THE ORIGINAL ONLINE DELIVERY
AGGREGATOR…
PAGE 73
…AND WE ARE INVESTING TO STAY ON TOP
PAGE 74
Jeff Lawrence
CHIEF FINANCIAL OFFICER
AGENDA
Domestic International
Same-Store Same-Store
Comps Comps
Domestic International
New Store New Store
Growth Growth
=
Global Retail Sales
PAGE 77
RETAIL SALES GROWTH GEOGRAPHICALLY BALANCED
Retail Sales Growth with FX
18.0%
16.0%
14.0%
6.9%
12.0% 5.9%
9.1% 6.8%
10.0%
Sales from International
8.0% 5.3% 1.8% Sales from Domestic
6.0% 4.9%
4.0%
6.6% 6.6% 6.3%
2.0% 2.9%
4.3%
1.9% 1.6%
0.0%
2011 2012 2013 2014 2015 2016 2017 Q3 YTD
PAGE 78
Note: 2015 excludes impact of the 53rd week
RETAIL SALES GROWTH GEOGRAPHICALLY BALANCED
Retail Sales Growth without FX
18.0%
16.0%
9.2% 9.0%
14.0% 8.2%
12.0% 8.1%
10.0% 7.3%
Sales from International
8.0% 6.9%
6.7% Sales from Domestic
6.0%
4.0%
6.6% 6.6% 6.3%
2.0% 2.9%
4.3%
1.9% 1.6%
0.0%
2011 2012 2013 2014 2015 2016 2017 Q3 YTD
PAGE 79
Note: 2015 excludes impact of the 53rd week
STORE GROWTH FINALLY COMPLEMENTING
ROBUST US COMP GROWTH
Domino’s Domestic Retail Sales Growth
18.0%
16.0%
14.0% 2.2%
3.0%
12.0% 3.3%
10.0%
Sales from New Stores
1.7%
8.0% Same Store Sales
6.0% 0.8%
12.0%
10.5%
9.4%
4.0% 7.5%
0.2% 5.4%
0.2%
2.0% 3.5% 3.1%
0.0%
2011 2012 2013 2014 2015 2016 2017 Q3 YTD
PAGE 80
Note: 2015 excludes impact of the 53rd week
INTERNATIONAL CONTINUING TO GET DIVERSIFIED
RETAIL SALES GROWTH
Domino’s International Retail Sales Growth
(Excluding Impact of FX)
18.0%
9.4% 11.2%
16.0% 12.2%
8.4%
14.0% 7.7%
7.7%
8.1%
12.0%
10.0%
Sales from New Stores
8.0% Same Store Sales
6.0%
4.0% 6.9%
7.8%
6.8% 6.2% 6.3%
5.2%
2.0% 4.0%
0.0%
2011 2012 2013 2014 2015 2016 2017 Q3 YTD
PAGE 81
Note: 2015 excludes impact of the 53rd week
DECADES OF RELIABLE & DIVERSIFIED
COMP GROWTH
STRONG SAME STORE SALES TRACK RECORD
17 out of 21 years of positive sales
U.S. Same Store Sales
1997 - Q3 2017 12.0% 10.5%
9.9% 7.5% 9.4%
6.8% 4.9% 5.4%
4.5% 2.8% 4.0% 1.8% 3.5% 3.1%
0.0% 2.6% 1.3% 0.5% Avg:
+3.8%
-1.7%
-4.1% -4.9% Avg. Since 2010: +7.7%
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Q3
2017
YTD
International Same Store Sales
1997 - Q3 2017 21 consecutive years of positive sales
11.1%
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Q3
2017
YTD
PAGE 82
International sales exclude the impact of foreign currency exchange rate changes.
ACCELERATED GLOBAL STORE GROWTH
1,281
901
743 623
631
513
18.0%
16.0%
9.2% 9.0%
14.0% 8.2%
12.0% 8.1%
10.0% 7.3%
Sales from International
8.0% 6.9%
6.7% Sales from Domestic
6.0%
4.0%
6.6% 6.6% 6.3%
2.0% 2.9%
4.3%
1.9% 1.6%
0.0%
2011 2012 2013 2014 2015 2016 2017 Q3 YTD
PAGE 85
Note: 2015 excludes impact of the 53rd week
STRONG BOTTOM LINE RESULTS
$4.30
$3.45
$2.90
$2.45
$2.02
$1.69
Certain diluted EPS amounts are adjusted for items affecting comparability. PAGE 86
Items adjusting comparability are detailed in the respective Earnings Release on Form 8-K.
CONSISTENT RETURNS FOR OUR SHAREHOLDERS
$1,200
Recap
$1,100
Recap
$1,000
~$4.0 billion returned
$900 Recap
to shareholders over
$800
the last 12 years
($ in millions)
$700
$600
$500
$400 Recap
$300
$200
$100
$0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Q3 2017*
Ordinary Dividends Special Dividends OMR ASR
100%
80%
60%
40%
20%
0%
2010 2011 2012 2013 2014 2015 2016 2017
We Invest Differently
We don’t invest without discipline, but we do invest,
especially when we see expected value for our customers,
team members and shareholders
PAGE 90
INVESTING TO WIN
We Invest Differently
PAGE 91
INVESTING TO WIN
PAGE 92
INVESTING TO WIN
PAGE 93
FRANCHISEES INVESTING TO WIN
Building stores
Reimaging stores
Spending on digital and technology
PAGE 94
U.S. COMMODITIES OUTLOOK
PAGE 95
FX HAS BEEN A PERSISTENT HEADWIND
-$10.0 -$8.9
-$15.0
-$20.0
-$19.9
-$25.0
2012 2013 2014 2015 2016 Q3 2017 YTD
PAGE 96
2018 FX OUTLOOK FAVORABLE
PAGE 97
TAX REFORM
PAGE 98
IMPACTS FROM REVENUE RECOGNITION STANDARD
Advertising Fund
– Prior guidance netted revenues and expenses on the P&L
PAGE 99
BALANCE SHEET UPDATE
PAGE 100
LOOKING AHEAD BUSINESS
RECENT RESULTS TO 2018 OUTLOOK
PAGE 102
Source: NPD/Crest, Restaurant Trends and Company estimates.
REAFFIRMING 3-5 YEAR DPZ OUTLOOK
GLOBAL
RETAIL SALES
+8% to +12%