Papa John's global net openings at a 10-year high
Papa John's announced its fourth quarter and full year 2012 results today, which included systemwide comp sales of 5.2 percent for North America and 7 percent for international during Q4.
Systemwide comp sales were up 3.6 percent for North America and 7.1 percent for international for the full year.
Additionally, Q4 revenues jumped 20 percent primarily due to the extra week in the 2012 calendar. For the full year, revenues increased by 10 percent.
According to chief financial officer Lance Tucker, in addition to the comp sales increases, revenue was also up because of the net acquisition of 50 restaurants in the Denver and Minneapolis markets in the second quarter, as well as increased volume in the PJ Food Service business and a 7.2 percent increase in the number of units opening globally year over year.
During Q4, Papa John's opened 134 net units worldwide. For the full year, the company opened 280 net units worldwide, comprised of 143 North American units and 137 international units.
"We are especially pleased with these international results as the continued execution of our strategy allowed us to obtain profitability for the first time in many years in our international business segment. These results include full-year profitability for our UK business, a significant milestone as we continued to grow the Papa John's brand globally," Tucker said during this morning's earnings call.
CEO/founder/chairman John Schnatter added that the net unit global growth represents the company's highest number of openings in more than 10 years.
"We certainly expect this continued growth to keep happening. Today, we are approaching 4,200 restaurants globally with a strong global development pipeline with agreements in place to open approximately 1,400 restaurants over the next six years. I am very excited about the future of our brand worldwide," he said. "Our international business was profitable in 2012. This is the significant on many levels including the validation that our international business model is improving and our brand is resonating with the consumers worldwide."
Also during the call, Papa John's execs briefly discussed its marketing and branding initiatives, specifically the company's partnership with the NFL that began three years ago. Schnatter said that partnership has been extended for the long term, although the company wouldn't release specifics about dates.
"We are confident that our NFL relationship will continue to pay dividends for the brand for years to come. And it serves as the model for us as we look to replicate the success with future partnerships around the world," Schnatter said.
In addition to its global pipeline, Papa John's is also making "significant" investments in its technology infrastructure, according to Tony Thompson, chief operating officer. These investments are designed to help units operate at peak performance and support the chain's growth opportunities.
"We are making a major investment in a significantly updated POS system that when fully deployed will support continued store-level productivity and profitability," he said.
Papa John's is also investing in a new dough production facility expected to open this year in New Jersey.
"Once operational, this quality control center will supply our fresh dough and other high quality ingredients for our restaurants in the Northeast, while positioning the brand to support our continued growth in that region of the U.S.," Thompson said.
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