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Good morning, ladies and gentlemen. And welcome to the Domino's Pizza Incorporated Fourth Quarter Year End 2020 Earnings Webcast. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions we will follow at that time. [Operator Instructions] As a reminder, this conference call is being recorded.
I would now like to turn the conference over to your host – speaker, Chris Brandon, Director, Investor Relations, Stuart Levy. Please go ahead.
Appreciate it, Nora. And good morning, everyone. Thank you for joining us for our conversation today regarding the results of our fourth quarter and full year 2020. Today's call will feature commentary from Chief Executive Officer, Rich 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-K 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. And 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 may be referenced on today's call.
A 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. Thank you. 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 Financial Officer, Stu Levy.
Thanks, Chris. And good morning, everyone. We're excited to discuss our fourth quarter and annual results with you today. Overall, we had a very strong Q4 and full year 2020, despite the ongoing global challenges presented by COVID-19.
Before we jump into the numbers, I would first like to remind everyone once again that our fourth quarter included an extra week this year, which also included New Year's Eve and New Year's Day. Both of which are typically major sales days. We have an extra week in our fiscal year every 5 or 6 years, depending on how the calendar falls.
Typically, our fiscal year consists of three, 12-week quarters and a 16-week fourth quarter. But in 2020, our fourth quarter consisted of 17 weeks. In the earnings release we filed this morning, the impact of this additional week has been adjusted out of our 2020 results as an item affecting comparability. The next time this will happen is in 2026.
Turning to our results. Overall, our team members and franchisees around the world generated strong operating results, leading to a diluted EPS of $3.85 for Q4 and $12.39 for the full year. Our diluted EPS, as adjusted for the extra week in our fiscal year, was $3.46 for Q4 and $12.01 for the full year.
Here's some additional detail on the components of our earnings. In Q4, global retail sales grew 21.7% as compared to Q4 2019. As a reminder, global retail sales growth includes both comp growth and unit growth, which I'll break down for you in a moment.
Our global retail sales in Q4 were benefited by the extra week and also by a weaker dollar. When excluding the extra week and the positive impact of foreign currency, global retail sales grew 12%. For the full year, our global retail sales grew 12.5%. When excluding the extra week and the negative impact of foreign currency, global retail sales grew 10.4%.
Breaking down our global retail sales growth. Our US retail sales grew 22.8% during Q4 and 17.6% for the full year. When excluding the extra week, US retail sales grew 14.3% in Q4 and 15% for the full year.
Our international retail sales grew 20.7% during Q4 and 7.5% for the full year. When excluding the extra week and the impact of foreign currency, international retail sales grew 9.9% for Q4 and 5.9% for the full year.
During Q4, we continued to see positive momentum in our international business, including a reduction in temporary store closures and other operating restrictions, which contributed to sequentially stronger same-store sales performance and an increase in net units, which I'll discuss in more detail momentarily.
Turning to comps. During Q4, we continued to lead the broader restaurant industry, with 39 straight quarters of positive US comparable sales and 108 consecutive quarters or 27 years of positive international comps, both truly remarkable achievements.
Same store sales in the US grew 11.2% in the quarter, lapping a prior year increase of 3.4%. And same store sales for our international business grew 7.3%, rolling over a prior year increase of 1.7%. As a reminder, our same store sales growth is not affected by the extra week.
Breaking down the US comp, our franchise business increased 11.4% in the quarter while our company-owned stores were up 8.1%. The US comp this quarter was driven by a healthy mix of both ticket and order growth. Within that mix, our ticket growth was driven by an increase in items per order and a higher delivery mix, which often comes with an associated transparent delivery fee.
The 7.3% international comp was driven by ticket growth. Similar to in our US business, that ticket growth was driven by both a higher item count and a higher delivery mix.
Shifting to unit count. We and our franchisees added 116 net stores in the US during the fourth quarter, consisting of 118 store openings and two closures. For the full year, we and our franchisees opened 229 net US stores. Our international business added 272 net stores during Q4, comprised of 328 store openings and 56 closures. For the full year, we added 395 net international stores. In total, we and our franchisees opened 624 stores globally in 2020.
We're very pleased with our ability to continue to grow units during the pandemic and particularly encouraged by our strong growth in Q4. However, we do still face some challenges opening stores in certain markets, including delays in construction and permitting, which we will continue to monitor moving forward.
Regarding revenues and operating margins. Total revenues for the fourth quarter were $1.4 billion and were up $206 million or 17.9% from the prior year quarter. Total revenues for the year were $4.1 billion and were up $499 million or 13.8% from prior year.
The extra week increased revenues by an estimated $88 million. The remaining increase was driven by higher global retail sales, which in turn drove higher revenues across all areas of our business.
Changes in foreign currency exchange rates positively impacted our international royalty revenues by $0.4 million in Q4 as compared to Q4 2019, and negatively impacted our royalty revenues by $3.9 million for the full year as compared to 2019.
Our consolidated operating margin as a percent of revenues increased to 39.5% from 38.9% in Q4 2019, due primarily to higher revenues from our US franchise business, partially offset by investments made related to the COVID-19 pandemic.
Company-owned store margin as a percent of revenue decreased to 21.9% from 24.4% in Q4 2019 and was negatively impacted by higher COVID-related labor costs. As we announced in December of 2020, we paid a special bonus to our front line workers to thank them for their contributions throughout the pandemic. Supply chain operating margin as a percent of revenue increased to 11.6% from 11.1% in Q4 2019, driven by operating efficiencies and reduced fuel expenses.
G&A expenses increased approximately $19 million in Q4 2020 as compared to Q4 2019. For the full year, our G&A was $407 million, an increase of approximately $24 million as compared to prior year. We estimate that $6 million of these expenses were incurred as a result of the extra week this year. The remaining increase primarily related to higher variable performance based compensation expense and professional fees and was partially offset by lower travel expenses.
Net interest expense increased approximately $8 million in the quarter as compared to Q4 2019. We estimate that $3 million of this increase was driven by the extra week this year. The remaining increase was driven by a higher weighted average debt balance resulting from our 2019 recapitalization transaction and was partially offset by a lower weighted average borrowing rate.
Our weighted average borrowing rate decreased to 3.9% from 4. 0% in Q4 2019 due to the lower interest rates on the debt outstanding in Q4 2020 as compared to Q4 2019.
Our reported effective tax rate was 19.9% for the quarter as compared to 17.8% in Q4 2019. The reported effective tax rate in Q4 2020 included a 1.8 percentage point positive impact from tax benefits on equity based compensation as compared to a 3.9 percentage point positive impact in Q4 2019. We expect to see continued volatility in our effective tax rate related to these equity-based compensation tax benefits.
When you combine all of these elements, our fourth quarter net income was up $22.6 million or 17.5% over Q4 2019. For the full year, our net income went up $90.6 million or 22. 6% over 2019.
We estimate that the 53rd week positively impacted net income by $15 million in the fourth quarter and for the full year due to the additional week of sales and the associated operating leverage, which is included as an item affecting comparability in our earnings release.
Our diluted EPS in Q4 was $3.85 versus $3.12 in the prior year, an increase of 23.4%.
Our diluted EPS as adjusted in Q4 was $3.46 versus diluted EPS as adjusted of $3.13 in Q4 2019, an increase of 10.5%.
Breaking down that $0.33 increase a bit. Most notably, our improved operating results benefited us by $0.34. Our lower diluted share count, driven by share repurchases during 2020, benefited us by $0.16. I'll provide more detail on share repurchases in a moment.
Higher net interest expense, resulting primarily from the higher average debt balances I mentioned earlier, negatively impacted us by $0.10. And finally, our higher effective tax rate, resulting primarily from lower tax benefits on equity based compensation, as I mentioned previously, negatively impacted us by $0.07.
For the full year, our diluted EPS was $12.39 versus $9.56 in the prior year, an increase of 29.6%. Our diluted EPS as adjusted for the full year was $12.01 versus diluted EPS as adjusted of $9.57 in 2019, an increase of 25.5%.
Shifting to cash. Our economic model remains strong, and it continued to generate significant free cash flow throughout the quarter. During full year 2020, we generated net cash provided by operating activities of approximately $593 million. After deducting for CapEx, we generated free cash flow of approximately $504 million. Regarding our capital expenditures, we spent approximately $89 million on CapEx in 2020, primarily on our supply chain centers and technology initiatives.
During Q4, we also repurchased and retired approximately 568, 000 shares for $225 million or $3.96 per share on average, bringing our 2020 total repurchases to $305 million. Subsequently, we've also repurchased an incremental 66,000 shares for $25 million year-to-date in Q1 2021.
Related to our repurchases, we're also pleased to announce that, as you saw in this morning's earnings release, our Board of Directors has approved a new $1 billion share repurchase program, which has replaced the remaining authorization under our existing program.
Additionally, during Q4, we returned $61 million to our shareholders in the form of two $0.78 quarterly dividend payments, bringing our 2020 total dividend payments to $122 million. As we move into 2021, we're excited to announce that our Board of Directors has declared a quarterly dividend of $0.94 per share, to be paid on March 30, an increase of 21% over the previous quarter's dividend. When you add the share repurchases and quarterly dividends, the cumulative impact is that we returned more than $425 million to shareholders in 2020.
Before wrapping up the financial update, I'd like to walk you through the impact of the COVID-19 pandemic on our Q4 results, as we have done in previous quarters. During Q4, the estimated 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 $7 million.
As we look ahead, we would like to remind you of the 2021 outlook items that we communicated in mid January, as well as provide you with a longer-range outlook. We currently project that the store food basket within our US system will be up 2.5% to 3.5% as compared to 2020 levels, and we do expect some volatility around that range quarter-to-quarter.
We estimate that foreign currency could have a $4 million to $8 million positive impact on royalty revenues in 2021 as compared to 2020. We anticipate our gross CapEx investments to be approximately $100 million, as we continue to invest in strategically growing our business, including in technology, innovation, new stores and supply chain capacity. We expect our G&A expense to be in the range of $415 million to $425 million.
Keep in mind that G&A expense can vary up or down depending on, among other things, our performance versus our plan, as that affects variable performance based compensation expense, as well as other areas such as corporate store advertising.
In addition, in this morning's earnings release, we also announced our two to three year outlook of 6% to 10% global retail sales growth, excluding foreign currency impact, and 6% to 8% global net unit growth.
We anticipate providing additional outlook measures if and when we have the appropriate visibility into the broader environment such that it would be meaningful for the investment community.
In closing, our business continued its strong performance during the fourth quarter and for the year, 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, as I intend to do in each of these calls, I want to take a minute to thank our incredible team members and franchisees around the world. They're the reason our brand is able to generate these results.
Thank you again for joining the call today. And I'll now turn it over to Ritch.
Thanks, Stu. And thanks to all of you for joining us on the call this morning. 2020 was a milestone year for us at Domino's. It's our 60th year in business, and it certainly was a year like no other. We and our franchisees entered the year with great optimism and solid plans to continue to grow the Domino's brand around the world.
As COVID-19 swept across the globe, we were forced to adapt quickly to a new and more challenging operating environment. As we continue to deal with the pandemic, we were also confronted with profound issues around social justice that could not be ignored. Throughout the year, my team and I led with our values. And we stayed focused on our core stakeholders. Those are our customers, our team members, our franchisees, our communities and our shareholders.
And despite the many challenges, our franchisees and team members rose to the occasion and delivered exceptional results during 2020. I am so grateful for the hundreds of thousands of committed people around the world who wear the Domino's logo every day. The year like no other really brought out the strength and determination that makes the Domino's culture so unique.
Now I'd like to do a few things on the call this morning. I'll share some reflections on our performance during the quarter, but I'll focus most of my commentary on 2020 in total, across both our US and our international businesses. And I'll discuss some of the things we are focused on as we look forward into 2021 and beyond, and then following that, as always, we'll take some Q&A.
So with that as our road map for the morning, let's get started with our US business. Over the past 60 years, we've worked very hard to earn the trust of our customers, built on our commitment to high quality products, service and image, along with our industry leading value.
In 2020, that foundation of trust was as critical as ever. This trust allowed us to connect with our customers in unique ways and to communicate and to execute a safe, quality delivery experience for them and their families.
We never took their trust lightly, and through innovations such as contactless delivery and Domino's car side delivery, we remain focused on ensuring that our customers felt as confident and safe as ever when they ordered from Domino's.
We gave our customers more options, expanding our menu with three new product launches in the back half of 2020. Our new wings and sauces have been enthusiastically embraced by our customers. And our new cheeseburger and chicken taco pizzas are now among our best-selling specialty pizzas.
Now innovation wasn't just limited to our delivery options or menu in 2020. We also delivered a number of operations in technology innovations to our stores. Those included our GPS driver tracking, our enhanced make-line and cuttable technology and tools, and our AI-enabled forecasting to better match demand with capacity in our stores. These innovations are all designed to increase speed, accuracy and efficiency, allowing us to continue to better serve our customers.
We, along with our franchisees, also remain dedicated and disciplined on the value we're known for when our customers really needed it the most. Our core 5.99 and 7.99 platforms have been a reliable, important part of the Domino's brand experience for many years.
While we certainly brought new customers into the brand over the last year, the story of 2020 was more about the frequency and loyalty of our existing customer base. Our customers ordered more often. And when they did, they also ordered more items. And we saw that specifically among our loyalty program members.
We now have over 27 million, 27 million active members in our Piece of the Pie Rewards loyalty program. Notably, we achieved continued year-over-year growth in our loyalty program without running any of our more aggressive week long promotions during the last three quarters of 2020.
Now despite the challenges associated with construction and permitting during the pandemic, store growth was once again a significant driver for us of growth in the US. We and our franchisees both new and existing, continued to invest in our businesses, resulting in 229 net new stores for the year.
If you look back over the last 5 years, we've opened nearly 1,200 new stores in the US and we have closed fewer than 80 over the last 5 years. We continued to invest in our supply chain business to support the growth of our franchisees, opening two new US centers in 2020, on time and on budget. And that's despite the challenges presented by the COVID-19 pandemic.
We opened in Columbia, South Carolina in March. We opened in Katy, Texas in December. And in September, we also added a thin crust production line to our existing supply chain center in Edison, New Jersey.
We also invested in the safety and well-being of our frontline corporate store and supply chain team members throughout 2020. We invested in equipment and processes designed to ensure their safety and an enhanced sick pay and benefits and enhanced hourly wages, recognizing the unique challenges of working during the pandemic, including the nearly $10 million in bonuses that we paid to our corporate store and supply chain team members in the month of December.
And we invested in our communities throughout 2020, partnering with our franchisees to donate 10 million slices to first responders, frontline workers and families in need, responding to natural disasters by getting food to people in need, launching a national hiring campaign to provide 30,000 jobs to workers who may have been displaced from theirs, committing $3 million to support black communities in the US, including $1 million to establish the Domino's Black Franchisee Opportunity Fund, and partnering with our franchisees to raise $100 million over the next 10 years for St. Jude Children's Research Hospital. We and our franchisees raised $13 million for St. Jude in 2020 alone.
Now looking ahead to 2020 in our US business, we will continue as a work in progress brand, striving to get a little better each and every day. And I'll highlight a few focus areas. And not surprisingly, most of these areas will not be new news to you.
First, we will continue to fortress our markets, driving faster and more consistent service, lower delivery costs, better economics for drivers and incremental carryout traffic. Fortressing will continue to drive overall store growth into 2021, including in our company owned markets.
We will continue to deliver new product innovation in 2021. We will continue to produce world-class advertising. And we're excited to begin our relationship with Work In Progress as our new advertising agency.
We will continue to invest in technology to enable great customer experiences, to drive speed, accuracy and efficiency inside our stores, to improve our corporate store team members' ability to support our business.
Value is always a key focus for us, and that won't change in 2021. More than ever, with many Americans out of work in these uncertain economic times, value matters. And we are committed to maintaining our unquestioned position of value leadership within the QSR pizza segment.
We're ramping up our focus on service in 2021, getting pizzas out the door to our customers hotter, fresher and more reliably than ever before through innovation within our stores. We're doubling down with technology, with training and with communications.
We will continue to invest in our frontline team members across our corporate stores and supply chain centers, increasing hourly wages in many markets and enhancing our team member benefits.
We will also be taking a comprehensive look at our environmental impact. Within the next one to three years, we will set science-based, time-bound commitments in accordance with the science-based targets initiative process to reduce the company's total contribution to climate change, and as always, we will remain obsessed, absolutely obsessed with franchisee profitability.
Stu shared our initial 2020 store level EBITDA estimate with you in January. And we will share the final number with you when that figure is ready. But we do expect it to be higher than the estimate that Stu shared with you last month.
While we believe this level of profitability and associated cash-on-cash returns exceeds any player in our category, we recognize that some of our franchisees and our corporate stores are under intense cost pressure.
Despite higher overall levels of unemployment across the country, many local labor markets remain tight and wages continue to rise across the country. Fixed costs such as rent and insurance also bring added pressure.
But my team and I recognize these challenges, and we remain intensely focused on helping to drive efficiency and profitability at the store and enterprise level for our franchisees, just as we are for our corporate markets.
As I look back on the fourth quarter and on the full year, I'm very happy with our US performance. We achieved our 39th consecutive quarter of positive same store sales growth and we surpassed $8 billion in US retail sales for the very first time. I am confident that we are well positioned to continue playing the long game in our US business.
Now I'm going to move on to International. During the fourth quarter, our pandemic recovery continued, as we reopened stores and delivered the strongest quarterly comp we've reported in four years. We marked our 108th straight positive quarter. That's 27 full years, an incredible run that seemed in doubt when COVID struck early in the year.
And I'm particularly pleased that our master franchisees continued to invest in the business, opening 272 net stores in the quarter and 395 net for the full year. Now when you consider that we had about 2,400 stores temporarily closed back in Q2, this is truly a remarkable achievement. And it highlights the terrific unit level economics that our master franchisees have built in many markets around the globe.
There is no question that we had more closures in 2020. In fact, we had over 300 than you would normally see from Domino in a typical year. This was driven by strategic choices in several markets to close some previously underperforming units, including a number of units with formats that admittedly would have struggled in the new operating environment rather than reopening them after the pandemic.
So when I look forward, I am very optimistic about our master franchisees' ability to ramp-up our unit growth across the international business. And I want to thank our international partners for their engagement throughout the year.
We dramatically increased our communication across the system. And master franchisees from all over the world really leaned in, sharing best practices throughout the year to help their peers and to help our US team manage through the pandemic. This truly demonstrated the power of the global Domino's system. And we could not have responded so effectively to COVID without this level of partnership.
Now I'd love to share a few 2020 market highlights. We opened for the first time in Croatia, welcoming the team there to the Domino's family. We opened 95 net stores in China and grew retail sales by over 30%, accelerating growth in this very important market.
We were also very pleased to invest in DASH brands, our master franchise partner, with a $40 million investment in 2020 and the subsequent $40 million investment, which we completed in Q1 of this year.
We are excited to partner more deeply with their terrific management team and investors. And I am more optimistic than ever about the potential for Domino's in China.
Japan was an incredible success story in 2020, passing the 700 store milestone with 100 net stores and over 40% in retail sales growth. Germany is another market that saw outstanding retail sales growth of over 25%, with 100 - excuse me, where we are fast approaching 350 stores with much potential for future growth.
I'd also like to thank our teams that worked incredibly hard to reopen stores throughout the year following the COVID-driven closures; India, France, Spain, Mexico, New Zealand and Panama are a few of the markets, along with many others around the world, that have pushed hard to bounce back from significant temporary closures and to position themselves for growth in 2021. Based on the latest reports, we now have fewer than 150 temporary international store closures.
Now when we look at this recovery in our international business, India deserves a specific mention. After some strategic store closures earlier in the year, Jubilant Foodworks, our master franchise partner, dramatically accelerated growth with 50 net stores in their most recent reported quarter.
And as we look forward into 2021, I remain very optimistic about the long-term growth potential of our international business. The opportunity is there, our unit economics are strong and our master franchisees are committed. Combined with our corporate support and best practice sharing around the globe, we have the recipe to take this business to its full potential.
So in closing, 2020 was a year like none other, but Domino's is a brand like none other. I am proud of our franchise partners and our team members who once again proved to me that they are the best in the restaurant business.
And as we look ahead to 2021, we aren't sure exactly what the new normal will look like or when we'll get there, but we will remain diligently focused on delivering for our customers, our team members, our franchisees, our communities and our shareholders.
At Domino's, we have a long track record of profitable growth, driven by a disciplined operating model. This model served us well in 2020 and will continue to be the foundation for our growth in 2021 and beyond. This gives me a great deal of confidence in our ability to grow the Domino's brand over the long-term.
That confidence is demonstrated in this morning's release, where we announced our new two to three year outlook of 6% to 10% global retail sales growth and 6% to 8% global net unit growth as well as our new $1 billion share repurchase program.
So I'll leave my remarks this morning with a heartfelt thank you to our franchise partners and team members. And that's not just for your efforts in 2020, but also for your continued perseverance in 2021 as we battled COVID and the recent winter storms across the US. I am proud to serve you each and every day.
And with that, Stu and I will be happy to take your questions.
[Operator Instructions] Your first question comes from the line of Brian Bittner with Oppenheimer. Your line is open.
Thanks. Good morning, Ritch. Good morning, Stu. Appreciate all the remarks. And I appreciate the reinstallment of a two to three year sales outlook. And I understand that this year, you'll be lapping an unprecedented situation from 2020 and that the visibility may not be as high as normal.
But when you're talking about 6% to 8% unit growth, 6% to 10% retail sales growth, does this view also specifically apply to how you are thinking and we should think about 2021? At least on the unit growth side, it seemed like you had a really nice step-up in trends in the fourth quarter. So any additional color would be helpful? Thank you.
Sure. Thanks, Brian. I appreciate the question. And our new outlook that we've published is a two to three year look. But specifically to your question on the unit growth, we were really pleased to see some significant momentum building in the fourth quarter of the year, as you saw in the store growth numbers that we published, both for the US business and for the international business.
And the reality is there was a lot of pent-up demand out there throughout the course of the year where we just had challenges getting stores opened up due to construction and permitting and other issues.
But the fundamental unit level economics in the business have never been better. Stu shared a preliminary look at US store level EBITDA last month. And as we tabulate the final numbers, we expect it to be at least that 158,000 or higher. So terrific economics in the business. Our approach to fortressing in the US and in our international markets is still working very, very well for us.
And then as it relates to the global retail sales growth number, while COVID gave us some tailwind on that in the US, it was actually a headwind in the international side of the business when you look at all the temporary store closures that we had back in the second quarter, where we were up around 2,400 units that were closed, which had a significant impact, as you know, on retail sales back then. So we're optimistic, Brian, as we look forward, and that optimism is reflected in that new outlook that we published this morning.
Your next question comes from the line of Sara Senatore with Bernstein. Your line is open.
Thank you. I wanted to ask about the US kind of competitive background. I was interested. You said the star [ph] of 2020 was really about increased orders and spend from existing customers. I know that you always get a lot of questions about consolidation and independence.
But I guess my sense would be then based on what you're talking in your business, that maybe the whole category saw a nice tailwind, including both big competitors and independents. So maybe less about share shifts to Domino's and more about an aggregate kind of rising tide.
And I was just wondering if you could talk a bit about that now that we're a year into the pandemic, if you have a better sense of maybe where the traffic was coming from or going to and what the intra-segment dynamics look like? Thank you.
Sure. Thanks, Sara. And what I'll - as I answer your question, I'll break it down a bit across the two businesses that we run out of each of our boxes across the country. So if you start with the delivery business, most certainly, the pandemic brought a tailwind in the delivery business, not just for Domino's Pizza, but across the category, and frankly, across categories.
And during the year, we saw strong growth in both order counts and also growth in ticket in that delivery business as customers tended to order more pizzas. As I mentioned in my prepared remarks, we also saw that, in particular, our 27 million active loyalty members ordered more from us. Their frequency increased during the year.
If you contrast that with the carryout business, in the carryout business, COVID actually brought a headwind for us in terms of customer activity. As fewer customers during the pandemic were comfortable going out and walking into restaurants even to pick up carryout, we did see some pressure on order counts in the carryout business. And the growth story there in 2020 was really around ticket.
Now prior to the pandemic, that carryout business has been a terrific source of customer acquisition and order count growth for us. So as we look forward into 2021, that is one of the important drivers that we see in terms of our ability to continue to grow sales in the US, is the restart of that growth on the carryout side of the business.
And the one thing I'd add to that is, keep in mind, I think, as we've said before, in a lot of cases, the carryout customer is different from the delivery customers. So it's not necessarily a shift from carryout to delivery with the same customer base. It's an increase in delivery and a headwind in carryout.
And that's one of the reasons that we have such a high degree of confidence and kind of excitement about what that business can bring to us moving forward.
Thank you.
Your next question comes from the line of Chris O'Cull with Stifel. Your line is open.
Thanks. Good morning, guys. Ritch, several restaurants have accelerated their investments in technology given the increase they've seen in digital orders. And some of these companies are probably starting with newer technology that I'm guessing Domino's might have even.
So do you believe Domino's needs to ramp up its investment or accelerate plans to ensure its tech does not get surpassed by some of the competitors?
Yes. Chris, great question. And the answer is we've been investing for a long time, and we continue to increase that investment each and every year in technology, because you're absolutely right. The half life of any lead that you have is pretty short on that side of the business. And our investments will continue. They did in 2020 and will continue going forward.
We're continuing to make great progress with the development of our next-generation of our Pulse software, which is really the heartbeat of our stores. We're continuing to invest in our digital ordering platforms as well. And we saw a really nice growth in digital ordering. During 2020, our digital sales for the year went up about 5 points over 2019. We ran about 75% digital sales throughout 2020. So we will continue to make investments there to drive the business on the customer side.
We're also ramping up our investments in technology as it relates to how we operate our stores. So I've talked a little bit about GPS tracking. We invested in that in 2020, substantially rolled that out across the entire US system. We'll continue to invest there, and also additional technology tools at the make line and at the cut table inside our stores to make the jobs easier for our team members and to help us to get pizzas out the door faster to our customers.
Thank you.
Your next question comes from the line of Lauren Silberman with Credit Suisse. Your line is open.
[Technical Difficulty] incremental competition from the third-party delivery, customer restaurant acquisition, geographic expansion…
Hey, Lauren, we can't hear you here. I wonder if you could start over maybe a little closer to your mic.
Is this better? Hello?
Yes. You're breaking up.
Okay. I'll go back in the queue, hopefully.
Why don't we go to the next question? And Lauren, will come back and try again later.
The next question comes from the line of John Ivankoe with JPMorgan. Your line is open sir.
Hi. Thank you. I know you guys aren't going to, for a lot of logical reasons, give quarterly comp guidance, especially with the comparisons that are about to change so meaningfully in coming weeks.
But I did just want to get your overall thoughts, especially as you do have some leading indicators of markets that have reopened. And most people talk about the reopening trade of people going back, and dining in restaurants. And a lot of the consumer packaged food companies seem to suggest that they're not going to lose very much of their own business that, they've generated through grocery in 2020.
So the question is, as we think about second half of ‘21 versus second half of ‘19 or even if we think about ‘22 versus ‘19, what's your sense and listen, and I guess at this point, it's a guess. But you guys get to make an educated guess using some of the early market data that you have of kind of being able to grow sales versus the ‘19 level, even if we do say, hey, comping against high-teens comps is just always going to be difficult for any business, and we just shouldn't expect that.
But how are we feeling second half of ‘21 and ‘22 versus ‘19, given what might be a way for at least certain groups of people to go back to dining inside of restaurants?
Hey, John, yes, thanks for the question. And I guess, what I would say at a high level is that, we see a lot of - even with the tailwind that we had in 2020 in the delivery business, we had a headwind on the carryout side of the business, as I talked about earlier.
So when I look across 2021, one important growth driver for us is going to be to reaccelerate that growth on the carryout side of the business, because we know lapping some of the delivery tailwind is going to be difficult.
We're also going to continue to invest in value in the business, as we always have and making sure that as our customers continue to manage their households through what is going to be a fairly difficult economic time for a lot of Americans, we believe that continuing to stay focused on value is also going to help us.
As a lot of folks who have been paying a lot to have food delivered to their houses, as behaviors start to change and other options open up. We're going to continue to have Domino's as the unquestioned value leader in the QSR pizza segment. And frankly, broadly across the restaurant industry, when you think about what it costs to have food delivered to feed a family of four, we really like our positioning in that space.
We'll also look throughout the year to reinitiate some of our boost weeks, our aggressive value weeks that have been an important part of our strategy to acquire customers, over the last number of years.
So we're not going to do anything, John, just a lap a comp that’s not how we manage the business here. Everything that we do is going to be around how do, we continue to drive sustained and profitable long-term growth for our franchisees and ourselves.
And the only - the other thing I'd just add to that is, we also think we benefit from the fact that our store base is everywhere. We're not urban dominated or suburban dominated. We hit all markets. And when you hear folks talking about the wave of people that are going to rush back into dine-in restaurants, they're generally coming from a more densely populated urban perspective where those restaurants are more prevalent. As you start looking across the landscape and you look at that relative to our store footprint, it gives us a lot of confidence to be able to weather some of that.
And do you have any evidence in markets like Georgia, Mississippi, Alabama, Tennessee, maybe certain parts of Florida, that suggests that you are holding on to that business as '19 as some of the dine-in business in those areas is strong?
John, less - we see kind of less, I guess, you would say, less trends about region in the country, but what we - when you take a look at urban stores versus second city or suburban or rural, our business has been strongest in that rural and suburban area. It really is the urban centers where we've seen the most pressure on our business, frankly, across the carryout and the delivery businesses.
Thanks, guys.
Your next question comes from the line of David Tarantino with Baird. Your line is open.
Hi, good morning. Ritch, I was wondering if we could go back to your fourth quarter performance. And while still healthy, it was lower from a comps perspective in the US relative to the elevated levels you had during the middle of the year.
And I was wondering if you could just opine on what the reasons were you saw a slower trend exiting the year and whether that has any implications related to kind of your brand and the positioning in the market?
Sure. So David - and I hope I have a lot of quarters where I can talk about an 11% comp. So we're pretty proud of the comp as it is. But I will talk a little bit about some of the deceleration relative to the third quarter. And there is a couple of things.
One is that there is no question that the stimulus dollars and the enhanced federal unemployment insurance certainly puts money in consumers' pockets and allows them to go out and buy food. And as we move further and further away in the fourth quarter from that stimulus that had been enacted earlier in the year most certainly, that had an impact on our business.
As we continue to aggressively open stores, as that accelerated, certainly, the impact of some of those splits weighs a little bit on the comp. And then frankly, as we got deeper into the fourth quarter and you started to see the COVID-19 pandemic in a significant resurgence across the country, that has a material impact on the carryout business when folks get less comfortable getting out in their cars and going to visit places of business.
Great. Thank you, very much.
Your next question comes from the line of Peter Saleh with BTIG. Your line is open.
Great. Thank you and thanks for taking the question. Ritch, I wanted to ask about service times and delivery times. Maybe you could just give us how those trended throughout the year and into the fourth quarter, and really in the context of the fortressing strategy that you've been implementing for a couple of years now, as well as a pretty sizable increase in demand for delivery and the availability of drivers. So any details you could provide on that would be helpful? Thanks.
Sure. Thanks, Peter. Well, we've been working really hard on service times across the business. And what I'll tell you is that, when we got the initial rush of demand back in the second quarter, we certainly saw our service times suffer a little bit.
But team, both on the corporate store side and our franchisees as well, worked really hard to claw back and improve those times relative to the first wave of the pandemic.
Service time improvement is going to continue to be a significant not just in 2021, quite frankly, but longer-term effort for us, that really is one of the important moats that we have to build around our business. And fortressing is certainly a big part of that.
And we do continue to see, where we fortress our markets, we do see service time improvements, material improvements as we shrink the radius around the stores, allowing us to travel fewer miles and get to our customers with not just faster, but hotter, fresher food.
And on top of that, delivering our own food enables us to drive better service, right? Because we can go from the oven out the door without having to wait for a third-party to come in and pick it up.
Great. Thank you very much.
Your next question comes from the line of John Glass with Morgan Stanley. Your line is open.
Thanks and good morning all. I wanted to come back, Ritch, in state of the market share question. I think you shared ICR some market share to the delivery, and it was, if I remember correctly, like 36%. And that really didn't change from ‘19. So if that's correct, or if it's not correct, let me know.
But why - you're growing share in the past. And this year, you think will be a year where you could have grown share more just given your capability. So why do you think that's the case? Is it just everyone got better? Was it independents suddenly got stronger? What is it in that dynamic that maybe changed in 2020? And how do you think - why - what the causes of it?
Yes, John. I think what we saw in 2020 was just broad growth across the category. So while we had terrific growth in our delivery business, there was broadly across the category a lot of growth. A lot of independents that maybe didn't have a big delivery business back in ‘18 and ‘19, they jumped with both feet into delivery to stay alive in 2020.
And through the use of third-party aggregators to deliver their product, that certainly resulted in some delivery growth coming from some of the independents and regionals that maybe wasn't there in the past.
Thank you.
Your next question comes from the line of Eric Gonzalez with KeyBanc. Your line is open.
Hi. Thanks for the question. And good morning. Regarding the potential wage increases, I was wondering how that might impact your ability to hold on to those 5.99 and 7.99 price points. Or said a different way, recognizing that all good things might eventually come to an end, what would have to happen from an inflation perspective for you to need to back away from those platforms? And what can be done to protect those price points without having materially widen gap versus other items on the menu? Thanks.
Sure, Eric. So the interesting thing is, today, as it relates to wage environment, we've operated in a really wide spectrum of wage rates across the country as it is today. And I know minimum wage, in particular, is certainly a topic that everybody is thinking about out there.
But today, we operate in states that are at the federal minimum wage, all the way up to places like Seattle, which are already in excess of $15, $16 an hour. And we've still been able to offer the 5.99 and 7.99 platforms across the country.
And there is a couple of things that enable us to do that. One is the volumes that we run at, there's no way you can stay at that value level without having a high volume business like we have today.
Second is that our franchisees at the local level have flexibility around menu pricing and around delivery fees. And their transparent delivery fees at the local level, they're going to be higher in these higher wage markets than they are in some of the others.
So we've been able to manage our way through a lot of minimum wage increases across the country. And I'll tell you, quite honestly, in our corporate store business, we're not paying the federal minimum wage anyway. You can't go out there and hire people at that rate anyway. We're above the minimum wage, both for our folks that work inside the stores and our tip drivers on the road. And then in our supply chain business, we're in excess of $15 an hour everywhere we operate.
Yes. I mean, if you think about the offers, they've been -- we've had them for years. And every year, we basically have wage rate increases and food cost increases and continue to drive additional profit. And for us, it's - we do a ton of deep market research and analytics around where that profit maximizing price point is for us.
So it's not - it's certainly not set arbitrarily. And that is certainly a place where we provide a ton of value to the consumer, and we've been able to do it profitably and continue to do so.
Thanks.
Your next question comes from the line of Lauren Silberman with Credit Suisse. Your line is open.
Thanks. Can you guys hear me better now?
Yes. It’s much better. Thanks, Lauren.
Okay. Awesome. Sorry about that. So coming into COVID, Domino's and the pizza category in general is facing incremental competition from the growth in third party delivery. Richard you mentioned that COVID, the delivery channel overall has benefited with the acceleration of adoption?
So as you look at the competitive environment today, do you think Domino's is any better positioned with respect to third party delivery now that restaurants will likely be more focused on bringing back in-store traffic and there's some kind of regular more regulatory requirements, or in a more challenging position given the breadth and depth of competition has increased?
Yes, Lauren, for us, it's I guess, a little bit less about regulatory. I think for us, we -- be honest, we struggled a little bit understanding the long-term economics in some of the aggregator businesses. In 60-years, we've never made a dollar delivering a pizza. We make money on the product, but we don't make money on the delivery.
So we're just not sure how others do it. And in a world where we're trying to shrink our delivery area to get closer to our customer for better service, a lot of these third-parties are trying to expand to reach more customers, which we think just takes away from service.
And when you think about the profit equation, you get somebody who inserts themselves into the value chain, and they have to make their money somewhere. And it's either got to come from the restaurant or it has to come from the customer.
And we think overtime, that's going to put a lot of pressure, particularly on the independent restaurants to be able to continue to make margins in rising cost environments, while paying these aggregators.
And the customers overtime are going to start looking at the free delivery that cost them $15 to get $12 worth of food when they start digging in to look at service fees and service charges. So we're just not sure how it all plays out. And you've seen that with some of some of the public players in that space who have commented about the challenge of driving long-term profitability as an aggregator.
So for us, we continue to just be the low-cost delivery provider, provide great value. And we think as long as we're providing a great product with great service at a great value, we'll let everything else shake out. And certainly, we don't know how long it will take to all shake out. But from our perspective, we're in a pretty good spot.
Thank you.
Your next question comes from the line of Dennis Geiger with UBS. Your line is open.
Great. Thanks for the question. Ritch, I wanted to ask a little bit more on loyalty and new product innovation as we think about 2021 and even going forward. I'm just wondering if you could talk more about those two opportunities and kind of how those might allow you to keep some of the new customers that you might have gained in 2020, I guess, and or attract new customers going forward. Just how those initiatives may help you to kind of hold or even gain category share going forward? Thanks.
Sure. Thanks for the question. So I'll talk about loyalty, maybe just even a little bit more broadly because there were a couple of metrics that I shared earlier that I think are important on this front.
One is the increase in the number of active members of our piece of the pie rewards program, which was up to 27 million plus. We also saw an increase in engagement and frequency among that group as well, which is a big focus of ours. Once that program gets to that level of scale, 27 million plus. And we've got - beyond that, we've got 40 million plus that at some point have been enrolled in the program, and we've got 80 million plus customers that are in our database.
So we spent a lot of time on initiatives thinking about how can we continue to mine that treasure of customers and find ways to better serve them at their time of need to drive higher frequency.
Another metric I shared earlier that is also important is, the increase that we saw in digital engagement with our customers, with digital sales going up from 70% to 75% during the year broadly across the customer base that see another opportunity because those customers tend - our ticket tends to be higher because we do a better job with upsell on them. And once they start ordering digitally, they tend to be stickier with us over the long-term. So we'll continue, as we always do, many efforts focused in that space.
And then you asked about new products also. We had, as I mentioned earlier, three that we successfully launched in 2020 and that's going to continue to be part of our playbook going forward.
We've got some exciting things that our culinary team has been working on that I certainly like, and based on our testing, a lot of our customers do as been working on that I well. So you'll see some more news coming from us in that space during 2021 as well.
Thanks, Rich.
Your next question comes from the line of Chris Carril with RBC Capital Markets. Your line is open.
Hi, good morning. Thanks for the question. So just following up on the comments around carryout as well as on labor costs. How are you thinking about the carryout opportunity in the context of carryout margins versus delivery margins? Just - especially with the increasing focus on minimum wage and potential for incrementally higher labor costs?
Yes. It's a great question. And prior to the pandemic, we had taken the carryout mix up to about 45% of our orders. And that mix came down a bit during COVID, as we talked about earlier, given just the changing customer behaviors. We are very much focused on growing that carryout business in 2021 and forward.
And while the ticket is lower on a carryout order, to your point, there's so much less labor cost associated with each of those carryout orders. That the higher the average hourly labor rate gets in your market, the more of the profitability equation tilts toward those carryout orders.
And this is something that we've seen, frankly, in some of our international markets as well which have much higher labor costs than the US does. Driving that carryout business has been a really important part of continuing to grow profitability at the store level for our franchisees.
But we are profitable on both channels.
Absolutely.
Great. Thank you.
Your next question comes from the line of Brett Levy with MKM Partners. Your line is open.
Great. Thank you. Good morning. Just following up on, I think it was Eric's question. With all of the moving parts that are going on there throughout the system, with tough comparison, just rising cost.
How flexible and what are you hearing from the franchises in terms of how they're thinking about approaching 2021, whether that is from a marketing standpoint or a pricing or a willingness and ability to add to their labor pool? Thank you.
Sure. Great question. What I would tell you is that we have such a fantastic base of franchisees across the US who are excited and eager to lean in, in 2021. And that's in a couple of ways. One that you mentioned, adding team members to their stores. I can tell you that everyone I go out there and talk to is aggressively trying to hire and add to their teams. Because funny thing happens when you add more delivery drivers to your business, your sales go up over time.
But also, franchisees are also excited about continuing to invest in their businesses and in building new stores. Because as we continue to grow sales and as profits have increased, the equation around those new store openings, particularly when we've got places where we're fortressing or splitting, gets even more attractive. So we've got a committed group that's ready to lean in and invest in 2021.
Your next question comes from the line of Jeffrey Bernstein with Barclays. Your line is open.
Great. Thank you very much. Just a follow-up on the aggregator question. I know you had previously talked about consolidation within that subgroup and maybe promoting more aggressively. And you guys were keen to remain solo.
With that said, I think we will have seen that COVID has driven large increases in at least traffic on these sites. So even if you were to never allow aggregators to do your delivery, as Stu mentioned, which would – it allows you to retain the service levels and make sure you're still profitable.
But would you ever think about having your brand on their platform just to reach the additional eyeballs and generate the sales? I'm just wondering what the risks might be on that front just to drive the traffic, but not necessarily pay the risk – or pay the fees and have the risk of it impacting service. Thank you.
Yes, Jeff. We've looked at it many, many times over the last couple of years. And as some of our international markets do gather some of their orders through aggregators. We don't allow aggregators to deliver our food anywhere. But in some context, in our international markets, it's made some sense.
Every time we look at it here in the US, it just doesn't make sense for us or our franchisees economically. And if it doesn't make sense economically, it certainly doesn't make sense to take the risk of sharing all of our customer data with these third parties.
Thank you. The next question comes from the line of David Palmer with Evercore ISI. Your line is open.
Thanks. I guess this is a follow-up on a lot of questions about market share, but also the legacies of COVID in terms of your business going forward. Do you view any of these market share shifts as perhaps more sticky than the others? You meant – you've shown at the ICR presentation that you gained a lot of share of overall QSR pizza, which probably means that the independents got hammered pretty hard on the pickup at store. I'm wondering maybe, are those scars that remain? Or do you expect a big snapback?
And then conversely, you've talked about delivery share remaining flat in pizza. I would imagine it's down in overall delivery, and that might have some influence or some stickiness long-term or not. How are you thinking about these things? Thanks.
Yes. Sure, David. So the way we look at it is, we are executing against strategies to continue to drive market share in both segments of the business, both the delivery and the carryout segments. And certainly, 2020 was a very unique year in terms of how some of this shifted around, in particular, with so many restaurants jumping into delivery, and frankly, with so many consumers having no choice but to go pick up food or have it delivered. But we feel very good about the plans and strategies that our teams have put in place to continue driving market share in both of those segments of our business.
And it's hard to really make a generalization on the independents because it really does vary market to market and area to area. And a lot of that data is not yet in or really hard to get.
I do think, certainly, to the comments we made before on the aggregators where you have the smaller independents that jumped into delivery by using a third party, like I said, we have some questions about the viability of that long-term if you're an independent paying exorbitant fees for a third-party to step in your value chain. So when does that all shake out? Your guess is as good as ours.
Thank you.
Your next question comes from the line of Jared Garber with Goldman Sachs. Your line is open.
Good morning. Thanks for taking the question. I wanted to know, if you guys could give us an update on the part usage and how that's trended throughout the pandemic. And maybe some color around fourth quarter, maybe what you saw, any potential shifting trends with the ebbs and flows of COVID?
I would imagine that the weekend and the late night day parties took more of a hit this year. I wanted to know if you saw any changes of that during the fourth quarter? Thanks.
Thanks, Jared. Yes, story has been the same. We've really had some downward pressure on that evening and late night day part, really throughout the pandemic, with dinner and lunch staying really strong.
All right. Your next question comes from the line of Jeff Farmer with Gordon Haskett. Your line is open.
Thank you. Looks like your Carside delivery has been in place nationally for roughly eight months at this point. I'm just curious, if you guys can share some more color on how customer adoption is progressing more specifically as it continued to build with awareness? And could you share, hopefully, where your curbside delivery mix stood in the fourth quarter? Thank you.
Yes. Jeff, we're really excited about Domino's Carside delivery. And this is something that didn't even exist at the beginning of 2020. It was an idea, a concept that the team just pulled forward and accelerated the development on. And now we've fully rolled out across our system. And not only has it helped us in the pandemic to do safe carryout for customers.
But frankly, over the long haul, we look at Carside delivery as the way we will compete against the drive-through. We've only got about 10% or so of our Domino's in the US to have a drive-through window. So this is a great way for us to serve customers without them getting out of their cars.
Post the rollout, we have continued to improve our service times in Carside delivery. And our aspiration here, which is well within reach, is that we get to a point where you can get a Carside delivery at Domino's faster than you can wait in line at a QSR drive-through to get your food through the window.
And to your point on mix, we don't - we're not sharing that externally yet for competitive reasons. But we have seen a dramatic increase in customer usage of Domino's Carside delivery since we launched it. And part of our 2020 plans are going to be to drive that even higher.
All right. Your next question comes from the line of Andrew Charles with Cowen. Your line is open.
Great. Thank you. You mentioned that you guys grew the loyalty program in 2020 to a record 27 million members from about 25 million at the end of 2019. But it looks like the level of growth slowed from roughly 20 million members in 2018 to the 25 million in 2019.
Can you help reconcile this given efforts utilized in 2020 to help enroll customers in the program while there is obviously a more sedentary US population? Thanks.
Sure, Andrew. So part of it is, with these types of programs, as they get bigger and bigger, the growth in active membership gets more difficult year-on-year. But a couple of things that we were most pleased with when we look back at the loyalty program over 2020 was, one, that we grew it without in the final three quarters, the use of any of our more aggressive boost weeks, which are an important tool to drive customer acquisition.
And then the second thing is that we were able to grow the number of customers active in the program, while also still growing the frequency with which those customers order.
And when you take a look at driving volume in the business, it really is those two metrics in combination with one another that drive the overall increase in engagement and sales with those loyal customers.
Your next question comes from the line of Alex Slagle with Jefferies. Your line is open.
Yes, thanks. Good morning. On the franchisee profitability, obviously, 2020 was a knockout year. Just curious how much the reduced discounting and promotional efforts impacted the franchisee profitability and kind of thoughts on what you think it will look like into ‘21 and beyond.
Yes. We did terrific year on franchisee profitability in 2020. And what it's really driven by, it is driven by increasing order counts across the business, particularly on the delivery side of the business. But also increasing ticket, but smart ticket, not increases in prices, but increases in the number of items that customers bought on average for each of their orders.
So even in the face of some increases in labor costs and other fixed costs in the business, it really is that volume increase that drove the uptick in profitability during the year.
Yes. And that item - that uptick in the item count really basically gets you operating leverage in the store.
Thanks.
Your next question comes from the line of James Rutherford with Stephens. Your line is open.
Thanks for taking the question. I'm curious about how Domino's will navigate this mix shift that you're expecting back toward carryout after the big year of delivery gain. It seems like from previous comments, the carryout transaction is possibly more desirable than delivery from an operator's perspective given the margins.
But I'd love to hear more color about the top line impact, I mean, to the extent that certain customers turn a delivery order during COVID into a carryout order, for example, in the way home for work or something like that. What's the typical check size difference there?
And what are some things you could potentially do to elevate that carryout ticket without compromising the value proposition? I'm just trying to understand that potential impact to your royalty revenue stream. Thanks so much.
Sure, sure. And the objective for us will be to grow both of those channels. COVID, we don't have all the data out of COVID yet to fully understand all of the customer behavior changes. But prior to COVID, there is only about 15% of customers that were both delivery and carryout, because customers tend to be one or the other.
So as we look at the business going forward and think about how do we grow it in 2021 and beyond, it is going to be through a unique set of strategies around each of those two channels.
So while we're certainly going to be aggressive on the carryout side with Domino's car side delivery and other initiatives that we have in place, we absolutely are not stepping away from the delivery side of the business also.
And we've got a set of strategies that we're going to continue to execute on the delivery side as well so that we could hold on to those customers that we gained during the course of 2020.
We're not looking at it so much as a shift from one or the other as it is a reemergence or kind of gaining back some of those carryout customers that have been on the sideline. The most notable difference, obviously, from a ticket perspective is just the delivery fee.
And typically, it's just slightly - a little bit lower item count in those orders as well. But both channels, very attractive and profitable businesses for our franchisees.
There are no further questions at this time. I would like to turn the call back over to Chief Executive Officer, Rich Allison, for closing remarks. Go ahead, sir.
Thank you. And listen, thanks, everybody, for joining us on the call this morning. And Stu and I look forward to speaking with you in late April, when we'll discuss our first quarter 2021 results.
Ladies and gentlemen, this concludes today's conference. Thank you for your participation, and have a wonderful day. You may all disconnect.