LOUISVILLE, Ky. -- Papa John's International Inc. (NasdaqNM:PZZA) reported on Oct. 30 that third-quarter earnings fell nearly 9 percent due to flat sales at restaurants open at least a year, and store opening expenses.
Same-store sales increased 1.3 percent at franchised stores but were off 3.3 percent at company-owned units. Year-to-date, systemwide domestic same-store sales increased 1.1 percent, composed of a 2 percent increase at franchised restaurants and 1.5 decline at company-owned stores.
An operator of 633 company restaurants and franchiser of nearly 2,100 others, Papa John's said it expects fourth-quarter earnings to fall to within a range of 51 cents to 58 cents a share due to higher cheese and utility costs, and fiscal 2001 earnings of $2.08 a share.
According to The Wall Street Journal, BB&T Capital Markets analyst Barry Stouffer cut earnings estimates for Papa John's, lowering his fourth-quarter forecast to 53 cents a share from 54 cents, and his full-year estimate to $2.10 a share from $2.12. He maintains his hold rating on the stock, but wrote, "Absent a resurgence in sales trends, shares are likely to remain in a narrow trading range."
Analysts' consensus third-quarter estimate was 46 cents a share, the fourth-quarter estimate was 52 cents, and the full 2001 estimate was $2.08, according to market research firm Thomson Financial/First Call.
Trading of Papa John's shares on Oct. 31 closed at $27.86, down 65 cents, or 2.3 percent.
The company reported net income of $10.5 million, or 46 cents a share in the period, compared with $11.5 million, or 48 cents, a year ago.
Revenue rose 6.8 percent, to $240.1 million from a year ago.
During the quarter, Papa John's opened 54 restaurants, most of them franchised, and sold 19 corporate restaurants to franchisees.