• Third quarter sales slide leads Papa John's to revise '02 outlook

LOUISVILLE, Ky. -- Despite small gains in domestic comparable-store sales during September, Papa John's International, Inc. (NASDAQ: PZZA) is lowering its full-year 2002 domestic systemwide comparable sales guidance from a range of flat to +2 percent, to a range of -2 percent to flat.

On Oct. 8, the company announced its domestic systemwide comparable sales for the five weeks ended Sept. 29, 2002 increased 0.4 percent (composed of a 2 percent increase at company-owned stores and a 0.1 percent decrease at franchised stores).

According to a release, domestic systemwide comparable sales for its third quarter (the 13 weeks ended Sept. 29), decreased 2.5 percent (composed of a 0.7 percent decrease at company-owned stores and a 3 percent decrease at franchised stores).

Total systemwide international sales increased 5.4 percent for the five-week period and 5.2 percent for the 13-week period, on a constant U.S. dollar basis, over the comparable periods last year.

Year-to-date domestic systemwide comparable sales through Sept. 29 decreased 1.2 percent (composed of a 0.1 percent increase at company-owned stores and a 1.7 percent decrease at franchised stores).

In the release, the company cited negative sales trends and the highly competitive pizza industry as reasons it decided to lower its full-year 2002 domestic systemwide comparable sales guidance.

The company, did however, announce it expects its third-quarter earnings per share to be at or near the upper end of the previously announced range of 51 cents to 53 cents, due primarily to favorable commodity costs, such as low cheese prices, and the impact of repurchases of its own stock.

The company also reaffirmed fourth-quarter earnings per share expectations of 58 cents to 61 cents.

At of Sept. 29, Papa John's International owned 2,939 outlets, including 2,782 Papa John's stores (596 company-owned and 2,186 franchised) and 157 Perfect Pizza restaurants (two company-owned and 155 franchised) in the United Kingdom.

The company predicted that it would pass the 3,000-store mark by January, but has since seen both Papa John's and Perfect Pizza store numbers decline throughout 2002.

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