Papa John's reports strong '05 in U.S., intl. units down

 
March 7, 2006

LOUISVILLE, Ky.—Papa John's International saw its U.S. comparable-store sales, revenue and profit rise solidly during the fourth quarter 2005.

According to a regulatory filing, domestic system-wide comparable sales for the period ended Dec. 25, 2005, increased 6.4 percent (composed of a 9.9 percent increase at company-owned units and a 5.5 percent increase at franchised units). Total system-wide international sales increased 12.4 percent on a constant U.S. dollar basis.

Revenue for the period was $248.4 million versus $243.4 million for the same period in 2004, and net income was $14.4 million compared to $9.4 million.

Domestic system-wide comparable sales for the year-ended Dec. 25, 2005, increased 5.1 percent (composed of a 7.4 percent increase at company-owned units and a 4.3 percent increase at franchised units). Total system-wide international sales increased 13 percent for the full year, on a constant U.S. dollar basis.

Revenue for the full year was $968.8 million versus $925.3 million in 2004. Net income was $46 million versus $23.2 million in the year prior.

While its domestic system is flourishing, ongoing struggles in its international markets, particularly the United Kingdom and Mexico, added to previous losses. For 4Q 2005, its international segment lost $2.3 million, more than double the loss posted in the comparable period in 2004, and for the year it lost $5 million, compared to $4.3 million in 2004.

In recent regulatory filings, the company warned profits would likely take a hit if it could not reverse the fortunes of Perfect Pizza, the Chertsey, England-based 112-unit operation it purchased in 1999. In the Feb. 28 filing, it said it will sell the chain within the next 12 months and has classified Perfect Pizza's operating results as "discontinued operations" and its associated assets as "held for sale."

There were 205 Perfect Pizza units when Papa John's bought the chain, but the combination of ongoing store closures and limited rebadging to Papa John's has reduced its presence by about 45 percent.

There are 89 Papa John's units operating in the U.K.

Papa John's also is struggling in Mexico, where it terminated its master franchisee agreement and closed 17 units in the fourth quarter. The company expects to close the majority of the remaining 22 units there in the first quarter 2006. Two years ago it had 54 units in Mexico.


Topics: Papa John's , Public Companies


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