July comp-store sales fall 4.7% at Papa John's, 2Q net slides 12%

Sept. 11, 2003

LOUISVILLE, Ky. -- Soft sales and stiff competition continue to exact their toll on sales and profits at Papa John's.

In a July 29 news release, the world's third-largest pizza company reported its July comparable-store sales fell 4.7 percent.

The company also revised its comp-store sales guidance downward for the remainder of the year to negative 4 percent to 6 percent. It had earlier predicted a drop of 2 percent to 4 percent for 2003.

Papa John's second-quarter revenues were $226.5 million, down 4.3 percent from $236.6 million for the comparable quarter in 2002.

Net income of $10.9 million represented a 12 percent drop from the comparable quarter, when net income was $12.4 million. Earnings-per-share was 60 cents, which exceeded the comparable quarter's earnings by one penny.

During the period, Papa John's opened 22 units, but closed 26.

As previously reported, domestic systemwide same-store sales for 2Q were off 4.8 percent, made up of a 4.7 percent decrease at company-owned units and a 4.8 percent decrease at franchise units.

The company cited continued weakness in the ready-to-eat pizza category and competitive pricing as reasons for the declining numbers. Increased operating costs also trimmed margins, including a 3.3 percent increase in store management-level salaries, a 1 percent advertising cost increase and a 1 percent hike in occupancy costs.

Despite the down results, Papa John's reaffirmed its 2003 earnings guidance of between $2.20 and $2.26 a share.

Topics: Financial Management , Papa John's , Public Companies

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