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