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Domino’s Pizza UK and Ireland, one of DPZ’s top 3 international master franchisees, reported strong 3Q sales trends today. Same-store sales grew 8.8%, which is an impressive number relative to last year’s comparison of up 14.1%. Domino’s UK and Ireland’s 535 stores account for about 15% of DPZ international store base. DPZ has relied on the success of its international business (represents over 25% of DPZ’s operating income) to offset recent domestic shortfalls. Going forward, the company expects a greater mix of its sales and income to stem from its international business as unit growth accelerates internationally. For reference, in 2008, DPZ continues to expect to add 200-250 net new stores despite its forecast of net negative 50-70 stores domestically.

Recent NPD trends indicate a sequential tick up in July QSR pizza category traffic. I would also expect August to have been helped by the Olympics. These two data points along with the fact that DPZ is facing an easier U.S. same-store sales comparison in 3Q (0.8% in 3Q07 vs. 4.4% in 2Q07) should benefit DPZ’s U.S. numbers. A pick up in 3Q U.S. trends would complement DPZ’s already proven international momentum.