Food & Beverage

Papa John's Q1 earnings make a Shaq-sized splash with investors

A scene from Papa John's new TV ad campaign featuring Shaquille O'Neal and promoting the brand's Epic stuffed crust pizza. (Provided)

May 6, 2021

Like its brand spokesman, Shaquille O'Neal, Papa John's Q1 earnings were outsized, with earnings per share of 82 cents (90 cents adjusted EPS) compared to what the consensus EPS estimate was of 57 cents. In fact, that result compares to the year-ago quarterly EPS of 15 cents, equating to growth in this key metric of more than 500%, the company said Thursday as it reported its performance to investors for the quarter that ended March 28.

Comp sales for the Louisville, Kentucky-based pizza brand were up 26.2% in North America and 23.2% internationally, while free cash flow was $53 million, compared to $24 million last year's first quarter, according to a company statement. Other key Q1 2021 results include:

24.9% growth in total revenues to $511.7 million.
68 Q1 net unit openings driven by International growth.
Brand now has presence in 50 countries.
Added nearly 11 million news digital channel customers over 12 months.

The company attributed its healthy growth in comp sales to menu innovation, including items like the Papadia, as well as the chain's Epic Stuffed Crust pizza in North America, which is central to a new TV campaign that starts today, featuring O'Neal as a new employee in disguise.

"Papa John's started 2021 strongly, delivering our sixth straight quarter of industry outperformance and fourth of double-digit global sales growth," President and CEO Rob Lynch said in the statement. "In addition, our unit growth accelerated, and we achieved 600 basis points of operating margin expansion, growing adjusted earnings per share 500%. This momentum is a result of the hard work of our team members and the strength of our franchise system, who together have delivered sustainable business growth over the past seven quarters, reversing the prior six quarters of global restaurant sales declines.

"The strategy we put in place more than 18 months ago — focused on innovation, development, operational improvements, and building a culture that values diversity, inclusivity and winning — has provided the strong foundation that underscores Papa John's industry outperformance and positive long-term outlook," said Lynch.