Operations

Papa John's Q1 results reveal turnaround, despite pandemic

Logo: File

May 7, 2020

Despite the many business pressures caused by COVID-19, Papa John's has nearly rebounded from the troubles that beset the company in recent years when it was still mired in the negative publicity around issues with its founder. In fact, in the first quarter of this year that ended March 29 — less than a year after current CEO Rob Lynch took the driver's seat at the brand — the company said net income grew to $8.4 million. That's compared to a loss during Q1 2019 of $1.7 million in net income, according to its SEC quarterly report filing. So, in Papa John's case, even in the throes of a pandemic, a year's time has been a true business turnaround story. 

The rest of the brand's first-quarter data provides more detail on that reincarnation, with Q1 2020 revenues also increasing to $409.9 million, up from $398.4 million last year's quarter. Additionally, Papa John's executives said during their earnings call Wednesday that the second quarter this year is starting out even better, with North American comp sales up 26.9% for most of the month of April. CEO Rob Lynch said it was the brand's "strongest month, in terms of AUVs and system-wide sales, in the company's 35-year history."

Other key Q1 2020 highlights include: 

• Q1 earnings per diluted share were 15 cents, improving from a Q1 2019 loss of 12 cents per diluted share. 
• International comp sales grew 2.3%, compared to 0.1% decrease last year's quarter.
• Global sales increase of 4.3%, compared to a 5.5% loss last year's quarter. 

"Our team members and franchisees have also served more than 2 million free slices of pizza to those on the front lines and in need," Lynch said during a Wednesday morning earnings call. "As seen in our April North America comparable sales, after the close of the first quarter, unprecedented numbers of families are relying on Papa John's. We are rising to this challenge, hiring thousands of new team members, safeguarding our supply chain and carefully managing our finances."

The company also said its preliminary estimated April fiscal period comp sales internationally grew 1.4%.