News

Papa John's Q3 financials show healthy growth

November 1, 2017

Papa John's International has announced Q3 financial results showing a 1 percent comparable sales increase system-wide in North America and a 5.3 percent boost in international comp sales, a news release said.

"Our global operators delivered another quarter of positive comp sales, with International leading the way, posting the 30th consecutive quarter of International positive comps," founder, Chairman and CEO John Schnatter said in the release. "We will continue to drive the long-term growth of the Papa John's brand by investing in our better quality product and technology platforms."

Other key indicators for the three- and nine-month periods ending Sept. 24 include:

• A 5.3 percent boost in Q3 earnings per diluted share to 60 cents, compared with 57 cents last year.

• A 2017 North America comp sales outlook of positive to 1.5 percent, revised from the prior range of 2–4 percent.

• Diluted earnings per share growth of 3–7 percent, revised from the prior range of 8–12-percent, including the 53rd week and excluding new equity-based compensation accounting standard impact.

Domestic company-owned restaurant margin as a percentage of restaurant sales fell 1.2 percent, primarily due to higher delivery costs, the release said. North American commissary and other margin as a percentage of related revenues fell 1.5 percent, due primarily to higher operating and startup costs for a new Georgia commissary that opened in Q3.

North America franchise revenues increased, primarily due to the refranchising of 42 domestic company-owned restaurants in Q4 2016. This increase was more than offset by a related decrease in domestic company-owned restaurant sales.

The International margin, as a percentage of international revenues, increased 2 percent due to higher revenues on higher comps and increased units. The increased revenues from International were somewhat offset by unfavorable foreign currency exchange rates.

Consolidated operating income increased $132,000, or 0.4 percent, for Q3; operating income as a percentage of consolidated revenues decreased 0.1 percent to 7.8 percent for the quarter.

The company added 130 net worldwide units over the trailing four quarters with more than 1,000 restaurants in the development pipeline as of Sept. 24, including more than 200 units in North America and 800 units internationally, most of which will open within the next six years.

The board announced a fourth quarter dividend of 22.5 cents per common share to be paid Nov. 17 to shareholders of record as of the close of business on Nov. 7.