Ladies and gentlemen, thank you for standing by and welcome to the Third Quarter 2020 Domino's Pizza Incorporated Earning Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session.

[Operator Instructions] And now I will hand the conference over to your speaker today, Chris Brandon, Director of Investor Relations. Please go ahead..

I appreciate it, Carmen, and good morning, everyone. Thank you for joining us for our conversation today regarding the results of our third quarter 2020.

I am also joined today by our Vice President of Finance, Michelle Hook, who recently took on an expanded role within our finance organization, that includes oversight of our Investor Relations function, in addition to her other responsibilities.

Today's call will feature commentary from Chief Executive Officer, Ritch Allison and Chief Financial Officer, Stu Levy. As this call is primarily for our investor audience, I ask all members of the media and others to be in a listen-only mode.

I want to remind everyone that the forward-looking statements in this morning's earnings release and 10-Q also apply to our comments on the call today. Both of those documents are available on our website. Actual results or trends could differ materially from our forecasts.

For more information, please refer to the Risk Factors discussed in our filings with the SEC. In addition, please refer to the 8-K earnings release to find disclosures and reconciliations of non-GAAP financial measures that maybe referenced on today's call.

Our request to our coverage analysts, we as always want to do our best to accommodate all of you today. So we encourage you to ask only one, one part question on this call if you would please. Today's conference call is being webcast and is also being recorded for replay via our website.

With that, I'd like to turn the call over to our Chief Executive Officer, Ritch Allison..

Thank you, Chris, and good morning, everyone. First, this morning, I'd like to welcome Stu Levy to the call. This will be Stu's first earnings call as our new CFO. As all of you know, Jeff Lawrence announced his retirement from Domino's on our Q2 call. And while we will miss Jeff and we wish him well, we're excited to welcome Stu, as our new CFO.

Stu brings a very successful operational track record and a strong connection to the Domino's culture, having led our supply chain division since January of 2019. Under Stu's leadership, we have significantly improved the operational and financial performance of our supply chain business.

Stu also has deep experience in strategy and planning from his work at Republic Services and at Bain & Company. Stu is supported here at Domino's by a very talented and experienced group of finance professionals. I know all of you will enjoy working with Stu and his team in the months and years ahead.

Now before I turn the call over to Stu, I do want to take a moment this morning to express a very well deserved thank you, and that's first to our customers for continuing to give us and our franchisees the privilege to serve you around the world.

To our franchisees and operators, I want to thank you for your continued energy, hustle and for the passion you have for this brand, for your teams, and for your customers. And finally to our corporate teams, for your incredible efforts in support of the brand, our customers, our franchisees and our many operators around the world.

In the face of this unprecedented pandemic, you have all continued to lead with our values first. And I am extremely proud to serve you as your CEO. So with that, I'm going to turn the call over to Stu for his remarks on the third quarter.

And then I'll come back to share my thoughts on the quarter, and more broadly on the Domino's business around the world. Stu, over to you..

Thank you, Ritch, and good morning, everyone. I'm really excited to step into this role, and I'm looking forward to working with all of you in the coming months and years. In the third quarter, we continue to lead the broader restaurant industry with 38 straight quarters of positive U.S.

comparable sales, and 107 consecutive quarters of positive international comps, a truly outstanding accomplishment and a testament to the overall strength of the Domino's brand, and the incredible hard work of our franchisees and team members around the world.

We also continue to increase our global store count, opening 209 gross new stores and 83 net new stores in Q3. Our diluted EPS in Q3 was $2.49, an increase of 21.5% over Q3, 2019, primarily resulting from strong operational results and partially offset by COVID-related expenses. Let me provide a bit more detail regarding our financial results for Q3.

Global retail sales grew 14.4% as compared to Q3, 2019, pressured by a stronger dollar. When excluding the negative impact of foreign currency global retail sales grew by 14.8%. Same-store sales in the U.S. grew 17.5% in the quarter, lapping a prior year increase of 2.4%.

And same-store sales for our international business grew 6.2%, rolling over a prior year increase of 1.7%. Breaking down the U.S. comp, our franchise business increased 17.5%, while our company-owned stores were up 16.6%. The U.S. comp this quarter was driven by a healthy mix of both ticket and order growth.

During the quarter, we continue to see a benefit from remaining relentlessly focused on providing good value for our customers and doing so in a safe and convenient way, both through our delivery and carryout channels.

This has resulted not only in overall order growth, but also in an increase in items per order, which drove our overall ticket growth in the quarter.

In our international business, we were pleased to see a sequential improvement over Q2 in retail sales, reflecting fewer temporary store closures and in some markets fewer service method and other operating hour restrictions, relative to those seen earlier during the pandemic.

The 6.2% international comp was driven by ticket growth, which was largely a result of a shift to more delivery orders, which tend to include more items and a delivery fee, thus yielding a higher ticket. Shifting to unit count. We added 44 net stores in the U.S. during the third quarter, consisting of 47 store openings and three closures.

Our international business added 39 net new stores during Q3, comprised of 162 store openings and 123 closures with those closures primarily occurring in India. We believe the pandemic has had a net negative impact on store openings globally, in part due to government restrictions, as well as general permitting and construction delays.

Overall, our unit economics remain strong, particularly in the U.S., and we continue to work with our franchisees to sustainably grow their businesses. Turning to revenues and operating margins.

Total revenues for the third quarter were up 17.9% from the prior year quarter, driven primarily by higher retail sales in the U.S., which in turn drove higher revenue in our supply chain and U.S. store businesses.

Our consolidated operating margin as a percent of revenues decreased to 37.4% from 38.5% in Q3, 2019, due primarily to investments made related to the COVID-19 pandemic, partially offset by higher revenues from our U.S. franchise business.

Company-owned store margin as a percent of revenue was down year-over-year and was negatively impacted by higher COVID-related labor and supplies costs. Sequentially, operating margins saw additional pressures from higher food costs, as we've continued to see significant fluctuations in commodity prices throughout the pandemic.

Supply chain operating margin as a percent of revenue was also down year-over-year and was negatively impacted by higher food costs, as well as similar COVID-related expenses. G&A expenses increased approximately $8 million as compared to Q3, 2019, primarily due to higher variable performance-based compensation expense.

Net interest expense increased approximately $6 million in the third quarter, driven primarily by a higher weighted average debt balance resulting from our 2019 recapitalization transaction, and to a lesser extent, borrowings under our variable funding notes during the quarter.

Our reported effective tax rate was 19.9% for the quarter, down 1.8 percentage points from the prior year quarter. The reported effective tax rate included a 2.8 percentage point positive impact from tax benefits on equity-based compensation.

We expect to see continued volatility in our effective tax rate related to these equity-based compensation tax benefits. When we combine all of those positive elements, our third quarter net income was up $12.8 million, or 14.8% over Q3, 2019. Our diluted EPS in Q3 was $2.49 versus $2.05 in the prior year, an increase of 21.5%.

Let me break down the $0.44 increase a bit. Most notably, our improved operating results benefited us by $0.35. Our lower effective tax rate, resulting primarily from higher tax benefits on equity-based compensation, as I mentioned previously, positively impacted us by $0.06.

A lower diluted share count, driven by share repurchases prior to the pandemic benefited us by $0.13. And finally, higher net interest expense, resulting primarily from higher average debt balances negatively impacted us by $0.10. Shifting to cash, our financial standing remains strong.

We continue to generate positive cash from operations during the third quarter, and as of the end of the quarter, we had more than $330 million in available cash, and an additional $160 million of available borrowing capacity under our variable funding notes.

During the third quarter, we generated net cash provided by operating activities of approximately $158 million. After deducting for CapEx, we generated free cash flow of approximately $141 million. During Q3, we also returned $31 million to our shareholders in the form of a $0.78 per share quarterly dividend.

Finally, while we have not repurchased any shares under our board authorized share repurchase program since the first week of January, we have $327 million remaining under the program for future repurchases. Before wrapping up the financial update, I'd like to walk you through the impact of the COVID-19 pandemic on our Q3 results.

As we've mentioned previously, we are steadfast in our commitment to do the right thing for our team members, our franchisees, our customers and our communities.

During Q3, the total impact from safety and cleaning equipment, enhanced sick pay and other compensation for our team members, and support for our franchisees and our communities was $11 million. Separately, the estimated Q3 impact on international royalty revenues from partial store closures was $2 million.

And while we withdrew our original annual guidance measures earlier this year, due to the uncertainty surrounding the business in light of the COVID-19 pandemic, given the growth in our overall business and the corresponding increase in G&A expense from Q2 to Q3, I wanted to provide some visibility on the anticipated full year G&A number.

We currently expect our full year G&A expense to be in the range of $405 million to $410 million for the 53-week fiscal year. Keep in mind, the G&A expense can vary in either direction depending on among other things, our performance versus our plan, as that impacts our variable performance-based compensation expense.

In addition to the G&A guidance, we currently estimate that FX for the 2020 full fiscal year could have a $5 million negative impact on royalty revenues, which is lower than previous estimates, driven by the strengthening of foreign currencies relative to the U.S. dollar.

In closing, our business continued its strong performance in the third quarter, and we remain in very good shape financially. Obviously, we will continue to closely monitor all aspects of our business operations given these uncertain times.

And finally, I'd be remiss if I didn't take a minute to thank our incredible team members and franchisees around the world. It's their dedication and commitment to our customers and our communities that allows us to generate these results. Thank you again for joining the call today. And now I'll turn it over to Ritch..

Thank you, Stu, and once again, congratulations on the new role. I'm certain our analysts and investors are going to enjoy getting to know you better in the days ahead. Now moving on to our results. I'll briefly discuss our U.S. and international businesses before we take some questions. So let's get started with a discussion about the U.S. business.

During the third quarter, the pandemic continued to drive a favorable tailwind for food delivery, coupled with a challenging operating environment. Our focus as a brand across our corporate and franchise stores remained squarely on serving our customers and our communities with a convenient, affordable and safe, food and service experience.

We continue to put our people first, making investments in our teams across our corporate stores, our supply chain centers, and our support resources. Around the country, we were also pleased to see our franchisees stepping up to support their teams. The third quarter marked our 38th consecutive quarter of positive same store sales growth.

And 17.5% is the strongest same store sales number we've posted in our U.S. business, over the course of that almost decade long run. We achieved this remarkable level of growth without running any aggressive promotions during the quarter. During Q3 of last year, we ran two 50% off-boost week promotions.

Now while we expect these boost weeks will continue to be an important part of our customer acquisition strategy in the future, the underlying demand and our strong everyday value messages allowed us to focus on store level profitability and on service during the quarter.

Now we still have work to do on service levels, but I am very pleased with our execution in absorbing the unprecedented volume in both our stores and our supply chain centers. During the quarter, we launched some terrific new products.

Our new chicken wings with improved sauces launched on July 7, and we launched two new specialty pizzas, our Cheeseburger pizza and our Chicken Taco pizza on August 24. Customer feedback thus far has been very positive on these new products.

And I have to tell you, as one of our most frequent customers, my new personal favorite pizza is our chicken taco pizza with jalapenos added to it. We continue to roll out technology to enable contact with service methods and to improve the operations of our stores.

Our Domino's Carside Delivery has been overwhelmingly embraced by our franchisees, and is available today and over 95% of our U.S. stores, providing a convenient contactless carryout experience across the U.S. We are working to continue to drive customer awareness of contactless delivery.

Our GPS technology is now in place in approximately 90% of our U.S. stores, giving customers a better experience and allowing our operators to better optimize the routing and dispatching of our deliveries. Our enhanced make line tools are rolling out across the country, and are now present in nearly 80% of our U.S.

stores, allowing us to get pizzas in the oven faster, and improving our service levels. These are just a few of the many innovations, our team is driving to improve the customer and the team member experience.

Now we've talked a lot about the opportunity to create frequency and loyalty with customers that have discovered or reengaged with the Domino's brand during this time. We believe value, convenience, quality and our new product news are bringing customers to us, and hope it will continue to bring them back.

Digital and loyalty adoption give us a good proven opportunity to drive additional customer frequency. And we continue to see strong growth and performance in both areas during the third quarter. Now we have to continue to focus on service as our category remains fragmented and customers often switch brands.

Executing the blocking and tackling of service is as critical for us as anything else. Unit growth remains a challenge, given the many obstacles that the pandemic has placed on construction and permitting across the country. But given those circumstances, I'm very pleased with the efforts of our franchisees and our corporate teams.

Collectively, we still managed to open 44 net new stores in the U.S., consisting of 47 openings and only three closures during the quarter. This is a terrific result when you consider what is happening across the category and more broadly across the U.S. restaurant industry.

Our development team and our franchisees continue to work closely on data driven assessments around fortressing, which continues to prove out strong results and tied to carryout, to delivery service, delivery costs, runs per hour for drivers, and most importantly, a great economic return for our franchisees who are making an investment in the brand.

Now while obstacles presented by the pandemic will create uncertainty in the short-term for unit growth for the foreseeable future, I remain highly optimistic around our U.S. unit growth potential for the medium and the long-term. So to close out our discussion on the U.S.

business, while we don't have all the answers on the future, we're going to continue to execute on our fundamental strengths. And as a work-in-progress brand, we will work diligently on the areas where we can and need to improve. All-in-all I'm proud of our third quarter U.S.

performance and very optimistic about our ability to continue driving profitable retail sales growth, for our franchisees and for Domino's over the long-term. Now let's move on to international, where I was pleased to see the momentum build across the business during the quarter. Thanks to the great work of our international master franchisees.

We have now achieved 107 consecutive quarters of positive same-store sales, ended 6.2% the highest international same-store sales result since the third quarter of 2016. As the pandemic continues to evolve around the world, we continue to see wide variations in performance across the international business.

And forward visibility continues to be quite challenged compared to normal. We had a number of markets that continue to generate strong retail in same-store sales growth, including China, Japan and Germany among others.

In these markets, our ability to remain open and operating throughout the pandemic has allowed us to benefit from the delivery tailwind in these markets. In several other markets, we are still fighting our way back from significant temporary unit closures and service restrictions to regain our sales momentum.

India and Spain are two large markets where our master franchisees and operators have worked diligently to reopen stores and continue to build order counts during the quarter. In markets where we have been disproportionately impacted, we've stepped in to support our master franchisees and true Alliance for the long-term success of the brand.

Now turning our attention to stores. Coming off a peak of approximately 2,400 temporary closures in late March, we have reopened the vast majority of those stores and now have fewer than 300 that are still temporarily closed. We’ve regained some momentum in new store openings during the quarter with 162 gross store openings.

However, those were offset with a higher than unusual, not higher than usual number of closures, resulting in 39 net new stores. Those closures were concentrated in India, where our master franchisee took the necessary steps to close some underperforming units that were also negatively impacted by the pandemic.

In the near-term, our retail sales growth will continue to be pressured by the slower pace of store growth that we've seen thus far and anticipate for the foreseeable future. Visibility will continue to be difficult and the unit growth environment could remain choppy.

While I am highly optimistic regarding the growth potential for our brand, given these delays and the choppiness in international store openings that we've seen as the pandemic has continued to persist over the past months, we are currently reassessing whether we will be able to achieve the timing of our previously articulated goal of having at least 25,000 stores open by 2025.

Now, I want to be very clear, I see this as a timing as opposed to a capacity matter, and I have a great deal of confidence in our international business and in our master franchisees. They are eager to ramp the pace of store growth back up to our pre pandemic pace, as we continue to pursue our long-term goals.

All things considered, I'm very pleased with the resiliency and performance of our international business, and I applaud our best-in-class master franchisees.

It is their incredible commitment to invest in the brand that has allowed us to serve our customers, and our communities across the globe at a high level, even in the face of so many challenges.

The global fundamentals around delivery adoption and market share upside, coupled with our strong value positioning, service delivery and unit economics all position us well for long-term growth and success in our international business.

And to sum it up, the third quarter was a true testament to the unquestioned strength of our international business model, and I remain very optimistic about the future of this business. Stepping back to look across the global Domino's enterprise.

The global backdrop around food delivery, digital ordering and the pizza category specifically continues to be favorable. Now, we don't know how long the pandemic will continue, and we don't know how long we'll continue to feel the related demand tailwinds and operational challenges.

However, make no mistake, we will continue to build on our strengths and we will continue to invest to position ourselves to win in the long game.

We'll be leading with our values, delivering high-quality menu offerings to our customers, delivering a strong, consistent and reliable value proposition, driving sustainable order and transaction growth, investing in technology to support the consumer and our store operators, relentless focus on unit economics and franchisee help, and continuing to fortress our market positions in the U.S.

and around the world. These are the areas, regardless of the external, economic and competitive landscape, where I believe we will continue to differentiate ourselves from the competition and drive shareholder value over the long-term.

In closing, our global franchisees and operators continue to rise to the challenge every day, and it continues to motivate me and my team. I am proud to serve them each and every day. And with that, we'll be happy to open up the line and take your questions..

Good morning, Ritch, and good morning, Stu. Congratulations on your new role as CFO. Your domestic comps, they continue to be very impressive. But I want to focus my question on the profit flow through constraints this quarter that caused EBITDA growth to trend below revenue growth. We haven't seen that in many, many quarters, the financial model.

Can you talk a little bit more about the nature of these COVID expenses? How much is potential structural changes to cost versus transitory? And separately on the G&A outlook, Stu gave for fourth quarter. It looks to be stepping up in a material way about $20 million year-over-year on the G&A line.

Can you also just flush out the inflection in that expense in the fourth quarter? Thanks..

Hey, Brian. Good morning. I'll start with your question around the U.S. store side and the flow through. As Stu outlined in his discussion earlier, we did see some significant costs in the quarter related to operating in the pandemic.

And that relates to frontline, hourly compensation, team member, enhanced sick pay benefits, protective equipment, cleaning supplies, et cetera, that are just a reality of operating in a pandemic environment.

The position that we've taken there is that we are going to focus on serving our customers, taking care of this demand that's been presented to us in the face of COVID, and also very much on supporting our team members and taking care of our team members in the store.

If we do those two things, then we believe that we position ourselves for the long-term to continue to accelerate growth in the business on the back of this unprecedented short-term boost in demand. As long as we're operating in a pandemic environment, I do expect to see at elevated level of operating costs in the stores.

But we don't see structural changes in the business over the long-term. It's simply the reality of operating in a pandemic environment. And the second part of your question around G&A, I'll let Stu comment on that..

Yes. And actually, before I do that, let me add just a little bit more color on the margin. And this is detailed a little bit more in the Q. But, relative to Q2, the food basket for us was up significantly in Q3. And that's been an effect that we've seen, just volatility in the commodity markets during the pandemic.

So, in Q2, the basket decreased year-over-year 1.2%. Q3, it was up 3.8%. And if you break that down a little bit, cheese, which is obviously a huge input for us, was at an all-time low in Q2, and it's been at all-time highs in Q3. And we've seen similar volatility across a lot of other commodities.

So that obviously puts a headwind on the business both in terms of store operations and our supply chain business.

On the G&A side, the largest driver there is higher variable performance-based compensation, but the other driving force here is a 53rd week, which obviously drives increased G&A year-over-year, so that it's something we get once every handful of years, but we happen to have it this year in the middle of a pandemic.

So it adds a little bit of additional complexity there..

Thank you, guys..

Thank you. Our next question comes from Eric Gonzalez with KeyBanc. Please go ahead..

Hey, just a quick question on the international store closures.

I think, given the number of closures in the segment to-date, should we expect to see an elevated number of closures in the next few quarters? Do you think those master franchisees in those volatile markets like India have already made the necessary adjustments?.

Yes, great question. And, yes, we've been very pleased to see the resiliency in that international business. And as you know, we had about 2,400 temporary closures back about six months ago.

And as the teams have worked very hard to get those stores reopened, they've also taken a look and assessed, are there stores in the portfolio that are structurally challenged in the near-term and the long-term. And I applaud the team in India for taking the necessary steps to go ahead and take some of those closures and we were supportive of that.

As I look broadly across the business, we still have a great deal of optimism around the medium and long-term growth potential in international. But as we look out across the near-term, I do expect to see some continued choppiness, as it relates to getting stores open due to construction and permitting delays.

And then also we expect to see a few more closures as the markets reassess their portfolios, and make sure that we're focusing resources going forward on the stores that are going to drive growth..

Thank you..

Thank you. Our next question is from Gregory Francfort with Bank of America. Please go ahead..

Hey, thanks for the question. I had a question for Stu. I see and I think most companies in the space have kind of paused the share buyback. And I guess you guys, I don't think bought back any stock in the quarter.

What are you looking for, I guess, to consider restarting that program? Is it just conservatism for maybe why you haven't started back up so far? Just thanks for the thoughts..

Sure, no problem. I appreciate the question. Yes, for us, we're always going to look at what the right way to deploy our cash is, whether -- and how to return that to our shareholders where it's appropriate.

I think earlier in COVID with the uncertainty, as a lot of companies did, we wanted to preserve cash and figure out until we kind of had a better understanding of how things looked like they were going to play out.

And obviously, now we've got better visibility and we'll continue to evaluate the best ways to deploy that cash to the business or how to return that to our shareholders..

Thanks..

Thank you. Our next question is from Sara Senatore with Bernstein. Please go ahead..

Thank you. I was just trying to understand a little bit more on the margin question. Obviously, investments in people are absolutely the right thing to do. And they are on the frontlines, and I think you said you didn't see this as a structural change.

But just from like a practical standpoint or modeling, how do we think about the ability to reverse any of these -- when the pandemic recedes.

Just having some kind of maybe color on whether these are increases in wage rates, which I assume would be really hard to turn back or just kind of the order of magnitude of the different factors that are contributing to that, just as they really just from a practical or mathematical perspective from next year. Thanks..

Sure. Hi, Sara, thanks for the question. As Stu outlined in his remarks, we had during the quarter about $11 million in costs that were associated with this COVID-related operating environment.

And as you think about how to look at that going forward, as long as we're operating in a pandemic environment, we're going to continue to see some elevated costs around safety and cleaning equipment, enhanced sick pay.

And then also during the pandemic, we've continued to make sure that we are taking care of our frontline team members with some enhanced compensation as well. And so as long as we're operating in a pandemic environment, we expect to see that also.

Now, over the long-term, certainly we will continue to take a look at the overall value proposition for our frontline team members, and that certainly evolved over time, some of it driven by minimum wage increases across the country and changes such as that.

But also with us taking a look at the value proposition that we offer our team members and making sure that we are employer of choice going forward. So, you'll certainly see post pandemic, some of these costs pare back.

And then what we'll do as a management team is we'll focus then from there on continuing to make sure that this is a great place to work for our team members, and that our team members are appropriately rewarded for their efforts..

Thank you..

Thank you. Our next question is from Chris O'Cull with Stifel. Please go ahead..

Yes, thanks. Good morning, guys, and congratulations Stu. Ritch, would you talk about the performance of markets in the U.S.

that have largely lifted restrictions? And in particular how order size and transaction performance has been impacted once restrictions are lifted?.

Yes, sure. Chris, it's interesting, and if I look across, if I look across the U.S. business, and where we've had kind of differential levels of performance, it's interesting. As you know, our brand tends to be less urban focused than a lot of other brands. We've got higher concentrations of our stores, and rural and second city type of markets.

And certainly, those markets have performed better than the urban and suburban markets have over time. So, we saw throughout the third quarter. We saw that in the second quarter as well. That dynamic continued to persist. And then some of the other dynamics that we've talked about in the past also continue.

We continue to see a higher ticket, in both our delivery and our carryout businesses. And I'm really pleased that that higher ticket was not coming from price increases. Price increases around food and delivery charges have been really moderate and in line with inflation, over the course of the third quarter.

But really, what we've seen is that continued increase and we've continued to see that increase in basket size. And then the other dynamic around the ticket, overall is just a higher mix of delivery orders relative to carryout orders in the business.

And delivery just by its very nature comes with a higher ticket, and with that delivery, albeit modest that delivery charge still added to the ticket. So that's a little bit about the dynamics and what we've seen across the course of the quarter..

Thank you..

Thank you. Our next question is from Lauren Silberman with Credit Suisse. Please go ahead..

Thanks for the question, and Stu, congrats on the new rule.

How do you expect the recent return of the NFL in college football will impact trends given ongoing restrictions at bars and restaurants across the country? And then are you willing to provide the cadence of comp trend throughout the quarter? And to the extent you're willing any color and quarter-to-date trends given football rally started first quarter end?.

Yes. So, hi, Lauren. We won't comment on any quarter-to-date trends this morning. But most certainly we are glad to see televised sports back. It certainly creates occasions for people to gather and when people have occasions together, they love ordering Domino's Pizza. And so, I'm certainly happy to see that coming back.

And as you know, for us, it's less about, fans being able to sit in the seats than it is about, the sports being on TV and folks being able to gather and watch it.

So, without the ability really, at this point to parse out, any results based on that I can tell you that we certainly view it as favorable relative to not having those sports on television for us..

Great.

And are you willing to provide the cadence to comp trend throughout the quarter?.

I'm sorry, Lauren, I could not hear your question..

Sorry.

The cadence of comp trend throughout the quarter?.

No. But what I can tell you is, we had strong growth throughout the quarter, but I won't comment on period by period specifics..

Okay. Thank you very much..

Thank you. Our next question is from Peter Saleh with BTIG. Please go ahead..

Thanks. And Stu, congrats on your first conference call. I want to ask about loyalty and loyalty memberships. I know earlier in the year, we were discussing that you guys had about 85 million unique users in your database, but about 23 million or so loyalty members.

Can you talk about the cadence maybe of signing up more or retaining more loyalty members throughout the year? Has that accelerated through the pandemic? And what exactly are you guys seeing from the loyalty guests in terms of their behavior in terms of spending recently?.

Hey, Pete. Thanks for the question. We certainly saw -- as the pandemic hit, we saw a pickup in loyalty enrollments at the beginning of the pandemic. And that leveled off some during the third quarter. But interestingly also we saw fewer folks who were exiting or becoming inactive in the loyalty program over time.

So the overall number of customers in our piece of the pie rewards program continued to increase. And then as we took a look at what was happening with our heavy and medium and light users, we were also pleased to see over the course of the quarter, that customers in each of those buckets were ordering from us more often.

And the ticket was higher also in each of those buckets. And that occurred in the third quarter, despite the fact that we didn't run any boost weeks in the third quarter of 2020. And that compares to running two of them of our 50% off promotions back in the third quarter of 2019..

All right, thank you very much..

Thank you. Our next question is from John Glass with Morgan Stanley. Please go ahead..

Good morning. Thanks for the question, and congratulations, Stu. Ritch, you talked a couple of times about service and service opportunities and obviously challenges in the business. I wasn't sure if it was a comment about you saw some service slipping for some reason, or this is just a work-in-progress company.

But can you just talk about, has there been unique challenges that have created service delays for example, in the business? And can you maybe make that into how you think the performance of some of the new products are doing? Does that create greater complexity? Or maybe how do you grade yourself? Or how do you think the new wings, the new pizza launch have contributed to sales today?.

Sure, John. First, on the service piece, most definitely at the beginning of the pandemic, when volumes in our business jumped up significantly, we definitely slipped a little bit on our estimated average delivery times. We have since, thanks to the great work of our franchisees and operators over the second and third quarter.

We've improved our service and gotten back to where we are as good or better than we were pre-pandemic, which is pretty significant when you think about the overall increase in the business that we've seen, and the fact that we deliver our own food.

So we're making sure that we've got trained and uniformed delivery experts bringing that product to the customer.

I suspect that, as long as I'm the CEO of this company, you will always hear me talk about wanting to improve service at Domino's, because, until we're getting to a place where we're delivering pizzas and not 30 minutes, not 25 minutes, but 20 minutes or less, I'll never be satisfied with where we are on service.

So, we're always going to be a work-in-progress there. Second part of your question around new products. I'm very pleased with the new products we've launched. Our wings, and our two new specialty pieces have been very well received by our customers.

You haven't seen us promote wings, because we're selling all the wings that we can get our hands on today. So very, very positive performance on the wings business. And then, we've launched specialty pizzas obviously just within the last couple of weeks of the third quarter.

But, those specialty pizzas are already at the top end in terms of mix of our specialty pizza range. So very pleased with where we are today, and also really pleased -- and I think you asked a great question. These do not add operational complexity within our stores.

In fact, the wings actually reduced operational complexity in the store, given how we package it. And each of the two specialty pizzas required only one incremental ingredient that we didn't have on the make line already..

Thank you..

Thank you. Our next question is from David Tarantino with Baird. Please go ahead..

Hi, good morning. Ritch, I was hoping you could elaborate a bit on your comments about the 25,000 unit target you laid out a few years ago. And in particular, I understand the issues with delays in terms of international market openings, but you also mentioned potential for some closing.

So, I wonder if you could talk about how much of your, I guess, pulled back on the target might be related to the closings you expect to see, and whether you're willing to frame up the magnitude of those closings?.

Sure, David. It really does relate to the pace of openings, much, much more so than concern about closures going forward. Now, hitting the closures first, we've certainly seen a higher number of closures in 2020 relative to normal in our international business, but I expect that we will work through those over the short-term.

So the real issue around the pace to getting to 25,000 is just the pace of the gross openings, which slowed during 2020 given some of the similar construction and permitting challenges that we've seen in markets all over the world.

But also for those countries that had temporary closures, the effort has really been directed in the short-term on getting those stores reopened, and ramping them back up to their full run rate. So, I'm optimistic over the medium to long-term, that we'll get back to the very strong pace of unit growth that we had in the international business.

It's just that the step back that we've had to take in 2020, does cause us to take a look and reassess the timing of that 25,000 milestone. Not the milestone but just the timing of reaching it..

It makes sense. And I guess one follow-up, I guess a lot of companies have talked about potentially accelerating the pace of opening, given the opportunities they see on the other side of the pandemic.

So I guess your comments might imply that that might not be possible or might not be desirable in the international markets, in a sense to catch up for the lost ground in 2020?.

No, I wouldn't take it that way, David. And if I break it down a little bit, first of all, starting on the U.S. side of the business, I see a heck of a lot of opportunity to accelerate our unit growth on the U.S.

side of the business, where while we've been in a difficult operating environment, if you look at our trailing four quarter net unit openings in the U.S., it's still very strong and consistent with where we were a year ago.

The international business, when you take a look at that, you really have to break it down, because if you talk about it, just in total, you lose some of the nuances evident.

And we have multiple markets in international that in fact have maintained pace and are accelerating on unit growth is just when you take into account some of those countries that had to take a step back with respect to temporary closures, I just expect it to take a bit more time to ramp back up in those markets.

But all around the world, our teams are taking a look at the real estate opportunities that are presented to us by the fact that there are quite a few other restaurant and retail businesses that are closing out. They're certainly at a much higher rate than we see inside our own business..

Great. Thank you very much..

Thank you. Our next question is from Dennis Geiger with UBS. Please go ahead..

Great, thank you. Ritch, you gave some really good color on the loyalty program. But just wondering if you could talk a bit more about new customer acquisition in recent months, kind of how that's trended since 2Q? And how you're thinking about the stickiness of those new customers as we look ahead? Thanks..

Sure, Dennis. Well, we've had -- if you look, if you break our business down, and I talk about it a lot in terms of the two businesses that we run inside each of our boxes, which is one is a delivery business, and the other is a carryout business.

If we take a look at our delivery business, what we've seen is a nice tailwind in customer acquisition, but also, just as important and in a lot of cases more so, our retention of customers and order frequency has also increased as well in the delivery business. And then if we look at the carryout business, the story is a little bit different.

We've not seen the tailwind on customer acquisition in carryout, and that's not surprising, as customers stayed in their homes much more often during the pandemic, but what we've seen is increase in retention and in the frequency of orders of on the carryout side for our customers.

Now, one of the reasons that we have rolled out our Domino's Carside Delivery, frankly, a lot earlier than we had originally planned to was so that we could get out there and you've seen us on TV talking to customers about a very safe and convenient way to come and get carryout at Domino's.

And the early results that we've seen in Carside Delivery in the third quarter have been very positive in terms of the customer receptivity to that service method..

Thanks, Ritch..

Thank you. Our next question is from Chris Carril with RBC Capital Markets. Please go ahead..

Thanks. Good morning, and thanks for the question.

Can you provide any further detail around how the value platforms performed over the course of the quarter? And did you see any change in utilization of the $5.99 and $7.99 platforms?.

Hey, thanks, Chris. The $5.99 platform continued in the quarter to be an incredibly important statement of value and driver of the business. And in fact, it was more important in Q3 than probably any time, because we didn't run any boost week promotions during the third quarter. So very important in terms of customer acquisition.

And we're always kind of taking a look at and thinking about how can we enhance that value platform. And as you've seen with the launch of our two new specialty pizzas, we took a look at how those could integrate into that value platform.

And the customer research that we did, gave us a high level of confidence that we could offer those pizzas at a $3 upsell to the $5.99, which gives great value to the customer and also really a nice margin opportunity for our stores as well.

Those pizzas -- and you'll also see them on our -- if you go on our homepage at $11.99 for a large, which again our research tells us is a great value for those high-quality specialty pizzas, and also gives our operators a terrific opportunity for a very profitable offering.

And then if I shift gears on the carryout value proposition, the $7.99, you saw us bring our wings to that platform at $7.99 for carryout as well, which you can now get wings along with all of our crust types, three topping pizza across all of our crust types in that $5.99 platform.

When I think about what's happening with the consumer right now, and looking forward with this recession that we are sitting in today, and the fact that there has been no incremental stimulus brought to the consumer, I look forward and believe that our value platforms and sticking to those platforms will only be more important, as we look out into the months and quarters ahead..

Thank you..

Thank you. Our next question comes from Brett Levy with MKM Partner. Please go ahead..

Hey, good morning. Thanks for taking the call. And Stu, best of luck in the new role. You started to discuss a breakdown of where you are in some of your customer facing investments.

Would you care to give any quantification in terms of how they're doing in terms of either efficiency, savings or driving sales? And also, how should we think about what's next in terms of new initiatives that you're investing in? Thanks..

Sure, Brett. We are very pleased with the rollout and adoption of these technology platforms. And actually it's an interesting kind of pivot for us, and how we're thinking about innovation at Domino's.

So, much of the innovation -- if you think back to 2010 and forward when we were driving rapid increases and digital adoption in our business, much of the innovation was around the ordering platforms and what we put in the hands of customers.

We're still doing that, but we've also significantly ramped up our efforts around technology innovation to support the operations of our stores. And that's where you get to GPS, you get to our enhanced make line tools, you get to our Carside Delivery.

Certainly they have customer benefits, but they've got frankly benefits to our operators that I'm even more excited about than the customer facing aspects there.

And as we think about that innovation pipeline going forward, a good bit of what we're going to be focused on is innovation that does make our stores at the incredible volumes, that we're managing today that makes our stores easier to run for our operators and our store managers.

They're resulting in a better quality of life for them, but also ultimately a better service experience for our customers..

All right. Our next question is from John Ivankoe with JPMorgan. Please go ahead..

Hi. Thank you. Just a follow-up and a question, the follow-up is quick. You mentioned that delivery fees, I think basically increased in line with inflation. That surprises me a little bit considering, some of the delivery and service fees specifically being taken by third party.

Do you think that's an opportunity, as we go forward to kind of think about your delivery and service charge being put together, maybe having a little bit more of a sliding scale going forward versus the fixed cost it is now? So that's the follow-up.

And the question, could you talk about the competitive intensity if there's a way for you to measure it in terms of the customer acquisition by third party, whether in the U.S.

or any particularly important international markets, whether you think that intensity is getting more intense or perhaps even easing?.

Great. Hi, John. Yes, on the delivery fees, we look at this as a competitive advantage for us going forward. When we think about the relatively low and transparent delivery fee that we charge our customers versus what you're seeing with the aggregators, this really is a key part of our value proposition for our customers.

And all of us have ordered third party delivery and most of the time is really hard to figure out what you're being charged, because you might be getting a free delivery. But then you go in and you see a line that says, taxes and fees.

And then if you're industrious enough to click on the little question mark, you figure out that it's not just taxes to the government, but you're also being charged a service fee. And for those of us that have been in the delivery business forever, we don't know what the service fee is if it's not paying for having the delivery brought to you.

So, I think it's an area that we've got to continue to be out there and educating our customers around the fact that, this is that we're a transparent brand. And if we tell you the delivery is $3.49, we're not going to be lump in on any additional fees there. Certainly our delivery fees do vary market by market based on labor rates.

We operate in places, where we've got $7.25 an hour labor in places where we have $15 plus. So we do adjust those fees, our franchisees adjust those fees up and down. But transparency is going to continue to be a big part of how we present ourselves to our customers.

The second part of your question around the competitive intensity, I would say, John, it's every bidders intense as it was in the second quarter and as it was in the first quarter, in particular with the third party aggregators continue to be very aggressive in the offers that they have out in the marketplace and in their advertising.

And when we take a look at our competitive set in pizza delivery, it's a different game than the game that we were playing five years ago. The number one competitor we look at is not any of the pure play pizza players, but it really is competing against delivery from the third party aggregators..

Thank you..

Thank you. Our next question is from Jeffrey Bernstein with Barclays. Your line is open..

Great. Thank you very much. And congrats Stu, on your new role. The question on the outlook.

I mean, we hear a lot that peers of yours that maybe operate their own restaurants are talking about doing more with less on the heels of, I guess, efficiency learnings through the pandemic and maybe achieving pre-COVID EBITDA dollars at sales levels well below the prior 100%.

So I think about your business, you're running a franchise model, obviously, but is there an opportunity there? I mean, and your sales being well above prior sales levels, I'm just wondering, what are the greatest drivers to further enhance your profitability? Obviously, after the unique COVID cost ease kind of any efficiency opportunities that you see to be more efficient in terms of learnings through COVID? Or if maybe that's just not realistic when you run the franchise business versus the flow through of a company operated model? Thank you..

Jeff, thanks for the question. Most certainly, we're very focused on driving dollar profitability at the store level. We talk about that all the time and we've been fairly transparent about it over time as well.

So in our corporate store business and then also as we work with our franchisees, we're absolutely looking at ways that we can more efficiently operate our businesses, coming out of COVID. Some of the store technology tools that I talked about earlier, are a part of that. I'll take GPS for example.

By utilizing the GPS technology inside our stores, our store managers know exactly where the drivers are at any given time. And that allows us to get more efficient in how we do our routing, how we pre-bag and get the orders ready to go once the delivery driver returns.

And also in cases of our best run stores today, our drivers aren't even coming at the rush back into the stores, our operators, because they know that drivers are coming back or running those pizzas out to the cars, handing them into the drivers and saving a minute, maybe two minutes on the turn, which ultimately results in better service and better labor that you run in the stores.

We're also working on some advanced forecasting and labor scheduling tools in our corporate stores, where the early results of our pilots and test there have been very positive, to help us to get better on service while reducing the labor costs associated with that service.

All of that gets thrown into a little bit of disarray as we talked about earlier in a pandemic, when you've got all of these additional costs that are layered on to the business, but as we look forward coming out of COVID, our expectation is that we will continue to drive efficiency and therefore, higher levels of EBITDA and operating cash flow in the stores..

And just to add to that though, the one thing we won't do is reduce the quality of what we're providing as a way to cut costs. You mentioned, thinking about the menu, as we launched new wings, that was to improve the quality of the product that we were providing, not because we thought we could take a little money out of the cost of the ingredients..

Thank you..

Thank you. Our next question is from Jon Tower with Wells Fargo. Please go ahead..

Awesome, great. Thanks for making the time. Just real quick, a clarification. Ritch, I think earlier in the conversation, in your prepared remarks, you had mentioned the idea that the company stepped in to support master franchisees and international markets. So I was hoping, one, you could expand upon that. And then two, can you discuss in the U.S.

side of the business, how perhaps the delivery versus the carryout mix might have impacted store level labor during the quarter, particularly relative to the second quarter, or even last year? And perhaps maybe the curb side business stepping up the cost of labor in the stores during the period? Thank you..

Thanks, Jon. So, first on support with our international master franchisees. We've had several of our international markets that were disproportionately hit by COVID, and had to have either a whole or a substantially partial shutdown.

And in those cases, we have a very long-term view on the partnership that we have with these international master franchisees.

And so, there have been some instances where we have leaned in with royalty and fee relief, for some of our international franchisees, because it's just the right thing to do in the short-term for our partners that are around with us for decades, over the long-term. Second part of your question, delivery and carryout mix.

Certainly, we've seen in terms of order mix, delivery in the third quarter was certainly a higher percentage by a couple percentage points of our order mix versus what we were running pre-pandemic.

And certainly, delivery orders bring with them on a per order basis, higher dollar labor costs, but those are also associated with higher ticket as well and also the delivery fee that comes along with it. And then finally to your question on curb side.

The terrific thing about our Carside Delivery is, we've been able to handle that business really without any significant increase in labor costs, at the store level. Ultimately, somebody when a customer walks into the store is going back to the rack and grabbing that pizza and greeting the customer and handing it to him.

Well, with this technology, we know when the customer pulls into the parking lot, a team member can get out and back into the store very quickly and we're not using incremental labor to do that..

Great, thanks. And then just one quick one.

Can you quantify the amount of royalty or fee relief you've provided for these franchisees in the international markets during the period?.

No..

Okay. Thank you..

Thank you. Our next question is from Todd Brooks with CL King and Associates. Please go ahead..

Hey, thanks for the question. Ritch, I was wondering now that we're about eight months into this pandemic window, what are your thoughts on the U.S.

businesses, as you look out to '21 and beyond about just in general survivor bias in the pizza industry, as far as over half the units out there being independently owned and operated? And thoughts on market share opportunities due to competitive closures but also real estate opportunities? And how that supports maybe an enhanced unit growth rate in the medium-term in the U.S.

market? Thanks..

Sure. We certainly look at 2021 and forward as an opportunity to continue to gain share in the pizza category. And I'll preface it by saying, none of us want to see independent pizza restaurants close due to the pandemic. We'd love to compete and fight it out every day, but we also love to go out and eat at independent restaurants as well.

And I feel for the challenges that a lot of these independent restaurants are going through and their proprietors that have put their livelihoods into those businesses.

But the reality is, if you were operating an independent pizza restaurant with a significant amount of your business dine in, and if you were relying on beverage mix and alcohol to bring a good bit of margin to your business.

If that business has now been shifted to where you have to do most of it off-prem and if most of that has to come by paying very high fees to third party aggregators, it's just a really difficult operating environment.

And I know all of you see a lot of the same industry analysts and prognosticators who predict the percentage of independent restaurants that may not reopen or may close permanently.

We don't know where that ultimately lands, but I do believe that the shakeout and the turmoil is going to create opportunity for us to further take share and continue to grow.

Our teams, both our corporate store team, and our franchisees are out there every day, looking for real estate opportunities that are opening up as a result of the pandemic, and also, in some cases, opportunities where we've shifted in some cities and towns from a more sort of landlord-friendly rental environment for it to more of a renter-friendly rental environment, an opportunity for us to get potentially some more favorable terms on leases going forward as well for some of the stores that we continue to operate..

The other thing that I would add is, our development team is working pretty rigorously with our franchisees going through a ton of analysis and pretty detailed modeling and determining where we actually want to be opening those stores. And that's got to be -- for the long-term value of the business that has to be the priority.

And if where we want to be there are real estate opportunities that gets evaluated the same way we would look at, do we build something freestanding.

Do we take existing real estate? Do we take advantage of a business that may have been less fortunate, et cetera? But it starts with where we want to be, and then shifts to what are the real estate opportunities there..

Great. Thank you, both..

Thank you. Our next question is from Andrew Charles with Cowen and Company. Please go ahead..

Great. Thank you. Congrats Stu and Ritch. I'd echo the jalapeno hack on that chicken taco pizza. It's very good. Stu, can you help rectify the 12.6% supply chain growth with domestic system sales growth of about 21%.

There's about a $6 million gap there and was curious if there's efficiencies or inefficiencies or additional costs we should be thinking about, potentially with the two distribution center openings in the back-half of 2020? Maybe it's a mix issue just given, obviously more wings being sold to that as well.

And then I know you said no two-part question, so I'm going to phrase this as an extension of my question.

On the longer-term, what is your broad observation having run supply chain? And where you think you could see margin percentage for the supply chain segments settle out longer-term?.

Yes, thanks for the questions. I like the extension part that you did there that was effective. The pressure in supply chain, and first of all, let me just comment, you mentioned the center openings. So we obviously opened the new center in Q2. We have a new center that we intend to open in Texas in Q4.

We also added capacity to our thin crust production in Q3. And that for us is an investment we're more than happy to make, because that means we're continuing to grow and we need that capacity. On the margin side, it's an interesting dynamic, because what we're trying to do is provide the best value for our franchisees.

If they can grow profitably, we as a company are going to benefit from that. So we're not trying to take advantage. Generally speaking, when we drive operating efficiencies or other improvements in the business, we're trying to share that with our franchisees so that they aren't negatively impacted.

During the course of COVID we saw a couple of things, one of which was the high increase in commodities. And what we were attempting to do with our franchisees again with sharing a little bit of that pain. So we were passing through commodity increase, but not taking additional margin on it.

So as the food basket goes up, the margin percentage comes down. So we're generating more margin dollars, but at a lower percentage so that savings can be passed along to the franchisee base. So that was one piece of it.

The second thing that we did was all of the additional supplies that were related to COVID, we were basically passing through to our franchisees at cost. We didn't feel we should be layering on additional costs for them, again, trying to make sure we can drive profitability to the stores, and then in turn, that helps the system overall.

So, are there other efficiency opportunities? Yes, it's impossible to run a supply chain the size of ours and not always have other opportunities for efficiency. And that's what our team works at every single day is how do we get more efficient, remain safe, be more efficient and more effective in delivering for our franchisees..

Thanks, Stu..

Sure..

Thank you. Our next question is from James Rutherford with Stephens. Please go ahead..

Hey, yes. Thanks for taking the questions. I just was curious directionally how you think about the demand picture for Domino's? And how that will evolve as the country reopens? Now, there was a question about this earlier, but when you have a few states that have completely removed restrictions on dine in capacity, and more will likely to follow.

A vaccine, of course, is in the work. So just what have you observed about consumer behavior as certain markets have lifted restrictions? And what directionally does that tell you about the normalized steady state AUVs for dominoes post-pandemic? Thank you..

Sure, James. It's still really early on in terms of cities and states reopening. And given the purchased frequency and cycle in our business, it's still early for us to draw any observations from cities that may have flipped from 25% capacity to 50% capacity over the course of the last month or two.

So what I'll do is I'll step back a little bit, just kind of give a perspective a little bit more broadly. And, I think some things that have happened here during the pandemic have really been the acceleration of some trends that were in place already. So when we think about how customers want to order food.

There was a trend toward digital ordering pre-pandemic, and that significantly accelerated during the pandemic. I don't expect customers to go back to calling on the phone, I expect digital ordering to continue to grow post-pandemic. And I feel that we are very well-positioned in that space today with 75% of our sales in the U.S.

digital as we sit here today. I also think that the trend around off-premise consumption, which was their pre-pandemic has accelerated during the pandemic. And I don't think we're going to see an immediate snap back. Certainly people are going to go or some people are going to want to go and sit down in a restaurant again.

And I'm one of those people for sure. But I think we're going to continue to see a movement in the QSR space toward off-prem consumption. And I think our business with the strength and delivery and in carryout, I believe also positions us very well for that trend to continue going forward.

So what we're trying to stay focused on here is, taking the opportunity that we've been given through customer acquisition during COVID, and to convert those customers into long-term loyal customers of Domino's Pizza. So far, the early results in that have been very positive.

As I mentioned earlier, our retention is up, our frequency is up across medium, heavy and even light users. And really, the challenge for me and my team ahead and for our franchisees and operators is, we've got to continue to do a great job serving those customers and we believe they'll continue to come back to us going forward.

And honestly, given the share that we have in the restaurant industry today, even as the number one player, we've got so much room for upside and share growth within a growing category that I'm far less concerned about the reopening of sit down restaurants than I am about us doing a great job on execution every day..

Excellent. Thank you for the thoughts..

Thank you. And our last question comes from Jared Garber with Goldman Sachs. Please go ahead..

Good morning. Thanks. Thanks for all the color on the call today. Really great commentary. Most of our questions have been asked and answered, but just wanted to get a little bit more color on China maybe.

Obviously, we heard the news last quarter of the strategic investment there and maybe any color on how the business is trending or how you're seeing the opportunity to shape up there, especially versus some of the commentary today on the timing of the 25,000 units by 2025? Thanks..

Thanks, Jared. China really has been a terrific success story in 2020, while we've had some slowdown in some of our markets around the world, China is definitely not one of them. Sales growth and unit growth have been very strong in China this year. We've got a terrific management team over there in place with our master franchisee, Dash.

And we've got a lot of optimism around the future growth of our business in China. China also back at the beginning of the year when the pandemic obviously hit China first, China really was -- our leaders over there really were the architects of a lot of the contactless service methods that we're using in the U.S. and around the world.

So not only have they delivered great results, but they've also stepped up to be thought leaders in our business. And, as I look forward on China, I expect that there will be a point in the future where China will be the second largest Domino's Pizza business in the world behind the U.S..

Thank you..

Thank you. And this concludes our Q&A session for today. I would like to turn the call back to Ritch Allison for his closing remarks..

Thank you. And thanks to everybody, for joining us on the call this morning. We look forward to speaking with you again on November 12th, when we host our virtual investor Q&A event. So we hope we'll get a chance to talk to all of you in just a month's time.

And then, of course, in February, we'll get back together to discuss our fourth quarter and our full year 2020 results. And until then, I hope all of you stay safe and healthy and we'll talk to you again next month..

Thank you, ladies and gentlemen, for participating in today's program. You may now disconnect..