Franchising

Papa John's reports strong Q2 results, partners with top franchisee to open 220 stores

Photo courtesy of Papa John's International.

August 6, 2021

Papa John's International Inc. reported strong Q2 2021 sales and earnings for the three months ending June 27, 2021, according to an earning release.

The company also announced a partnership with its largest franchisee, Drake Food Service International, to open over 220 restaurants by 2025.

Revenue rose from $460.6 million in Q2, 2020 to $515 million in Q2, 2021, while income rose from $20.6 million to $444.6 million, primarily as a result of higher comparable sales of 5.2% for North America restaurants, which benefited from continued menu, delivery and digital innovation as reflected in higher company-owned restaurant revenues, franchise royalties and commissary sales.

Diluted earnings per share fell from 48 cents in Q2, 2020 to a $2.30 loss in Q2, 2021, while adjusted earnings per share rose from 48 cents to 93 cents.

The board approved a 55.6% increase in the company's dividend rate per common share from 90 cents on an annual basis to $1.40 on an annual basis, and subsequently declared a third quarter dividend of 35 cents per common share to be paid on Aug. 27, 2021 to stockholders of record as of the close of business on Aug. 16, 2021.

"Papa John's delivered an eighth consecutive quarter of growth, with system-wide sales up 12% in Q2," President and CEO Rob Lynch said in the release. "We extended the record sales results we achieved a year ago, sustaining our industry outperformance as markets continue reopening."

The $515 million in quarterly revenue beat analyst expectations by $20.75 million, while the non-GAAP EPS of 93 cents beat expectations by 20 cents and the GAAP EPS of a $2.30 loss did not meet the expected gain of 73 cents, according to Seeking Alpha.

The expanded DFSI partnership will bring more than 220 restaurants across Latin America, Spain, Portugal and the U.K. by 2025.

As part of the partnership with DFSI, the company plans to open 50 new restaurants in the U.K. over the next four years, where it recently purchased over 60 Papa John's restaurants in London, making it the brand's largest franchisee in the country.

Under the terms of this expanded partnership, DFSI will operate more than 560 Papa John's restaurants in total by 2025.