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Papa John's Q1 results prove newly named CFO has work to do

May 9, 2018

Days after announcing it would put company veteran, Joe Smith, in the CFO spot, Papa John's released the Q1 results that he will undoubtedly be working to prop up in the future. A news release about the results indicated that its North American comparable sales fell 5.3 percent this quarter over the same period last year. 

It was not all dismal news, however, since internationally comparable sales grew 0.3 percent with international franchise sales increasing 21.1. Q1 earnings per diluted share were $0.50, compared with $0.77 in Q1 2017, which of course, was well before the debacle that ensued after former CEO and founder John Schnatter made his comments about the NFL last fall. 

Other Q1 2018 results include: 

• Free cash flow fell from $32.3 million last year's first quarter to $31.7 million this year. 
• International operations drove the addition of 13 net unit openings in Q1 2018. 
• Consolidated revenues decreased 4.9 percent to $21.9 million, attributed to lower volumes. 
• Consolidated pre-taxes income fell 46.6 percent or $19.5 million to $22.4 million.
• Domestic company-owned restaurants operating margin fell $8.6 million.
• North America franchise royalties and fees fell $2.8 million, or 10 percent. 
• International operating margin grew $1.3 million, attributed mostly to higher royalties from increased equivalent units and the favorable impact of foreign exchange rates.
• Diluted earnings per share dropped 35.1 percent to $0.50.  

"Although first quarter results were lower than the prior year, they were consistent with our expectations. We remain focused on enhancing our value perception and driving our strategic initiatives," President and CEO Steve Ritchie, said in the release.