REAL TIME COMMENTS FROM DPZ CALL

Management stated that they were confident that domestic sales growth was returning to levels consistent with long-range outlook.  The long-range outlook commentary includes:

  • Domestic SSS of 1-3%
  • International SSS of 3-5%
  • Slight increase in cheese prices ($1.50-$1.70/lbs range)
  • New unit growth of 200-250 units
    • Returning to “net zero” domestic store growth in 2010
  • Global retail sales of 4-6%
  • FX benefit of $3 million expected for 2010
  • Advertising has been meaningfully ramped up
    • The advertising fund is now a 5.5% national fund
    • A shift is taking place to more national advertising
    • More air weeks nationally in 2010 than at any prior point [better trends come at a cost]

Interesting data points on quarter-to-date trends in 1Q10:

  • Customer counts are growing appreciably following “new and inspired” pizza launch in the last week of 4Q09
  • Management stated that it only comments on current business conditions when there is a significant change in trends – DPZ has experienced a significant change in trends
  • Marketing 101 would indicate that management would expect to see some decline over time, but it has surpassed management expectations in its ability to sustain itself
  • Outgoing CEO looks forward to joining the team, as Chairman, in a few months to report “exciting” 1Q10 results