News

Papa John's FY2016 good, though some disappointed

February 22, 2017

The last quarter of 2016 was relatively good for Papa John's, though there is some indication that investors are disappointed with the company's quarterly and FY2016 results reported yesterday. 

Papa John's reported that for the quarter ending Dec. 25, it earned $32.6 million, or 88 cents a share, compared with $24.7 million, or 62 cents a share last year, according to a news release. The per-share figure amount comes to 69 cents when one-time items are figured in — just a 7 cent bump from last year's performance.

Quarterly sales rose 5.5 percent to $440 million, with North American comparable sales up 3.8 percent for the quarter and 3.5 percent for the year. International comparable sales rose 5.6 percent in the last quarter and 6 percent year-over-year.  

Other 2016 results include: 

• GAAP earnings per diluted share of $2.74 and adjusted earnings per diluted share of $2.55 for the full year 2016 — excluding special items — which represents a 22 increase over last fiscal year;
• system-wide North American comparable sales increased  3.8 percent in the fourth quarter, 3.5 percent for the full the year; and
• 126 new locations worldwide in Q4; 204 new locations for the full year.

"We are pleased to have delivered another excellent year in 2016," Papa John’s Founder, Chairman and CEO John Schnatter said in a news realease. "Thanks to the efforts of the entire Papa John’s family, we opened our 5,000th global unit and increased our digital mix to over 55 percent — all while delivering on our clear label promises and generating strong comp sales and another year of record earnings."

Fourth quarter 2016 revenues increased 5.5 percent to $439.6 million, while full year 2016 revenues grew 4.7 percent to $1.71 billion. Consolidated revenues increased $22.8 million, or 5.5 percent, for the fourth quarter of 2016 and increased $76.2 million, or 4.7 percent, for the full year. Revenue increases were due primarily to the following, according to the financial statement:

• domestic company-owned restaurant sales grew 7.2 percent in Q4; 7.9 percent for the full year largely due to comparable sales increases of 4.8 percent and 4.4 percent for the quarter and year respectively;
• International revenues grew 8.9 percent for the quarter and 8.4 percent for the year, net of unfavorable foreign currency exchange rates of $4.5 million and $12.2 million for the fourth quarter and full year; and
• China company-owned restaurant revenues declined $900,000 and $4.9 million in Q4 and the full year, respectively, primarily due to negative comparable sales and fewer restaurants in 2016.

In the current year, Papa John's expects diluted EPS to grow 8–12 percent, including the 53rd week. Other anticipated results include:

• North America comparable sales of 2–4 percent;
• international comparable sales of 4–6 percent;
• net global new unit growth of 4–5 percent, mostly in the second half;
• capital expenditures of $45 million–$55 million; and
• income tax rate of 31–33 percent.