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Papa John’s turns in strong first quarter

May 3, 2011

Louisville, Ky.-based Papa John's International Inc. announced its first quarter results that included a systemwide sales increase of 6.1 percent for North America units, and a 5.6 percent boost for international stores.

Earnings per share increased 18.5 percent over the same period last year. First quarter earnings per diluted shares were also up to 64 cents, surpassing analysts' predictions of 60 cents.

Additionally, Papa John's had 41 worldwide net unit openings during the quarter

"We are extremely pleased with our first quarter results," said John Schnatter, Papa John's founder, chairman and CEO. "In addition to posting what we believe to be industry leading 6.1 percent North American comps during the quarter, this marks the eighth consecutive quarter of positive North American transaction growth for the Papa John's system. I congratulate both our corporate and franchise operators on these tremendous results."

Schnatter added that the Papa John's team is well equipped to continue this momentum and drive the next phase of growth.

At the end of March, there were 3,687 Papa John's restaurants (613 company-owned and 3,074 franchised) operating in all 50 states and in 32 countries. The company's development pipeline includes approximately 1,450 restaurants (375 units in North America and 1,075 units internationally), the majority of which are scheduled to open throughout the next six years.

The remainder of 2011

Because of these results, Papa John's is updating its previously issued diluted earnings per share guidance range of $2.00 to $2.12, to a range of $2.02 to $2.12 for 2011. In updating its guidance, the company noted that its solid first quarter results are expected to substantially mitigate the unfavorable impact of projected commodity cost increases, most notably cheese, as well as increased fuel costs, throughout the remainder of the year.

The company also noted that certain management transition costs are not expected to have a negative impact on full-year 2011 results, but are expected to impact earnings per share by 2 cents to 3 cents in the second quarter. These transition costs include the recent resignation of J. Jude Thompson, former president, co-CEO and member of the board of directors.

The company continues to project full-year international comparable sales increases of a range of 1 percent to 3 percent, and project worldwide net restaurant openings of 190 to 220 restaurants.

New Charlotte/Douglas International Airport location

Papa John's has already gotten those openings underway with a new unit at the Charlotte/Douglas International Airport in Charlotte, N.C. The store opened this week and is operated by airport concessionaire P.J.J.D. Enterprises.

It is located in the airport's main concourse food court and serves "Papa's Pizza for One," an 8-inch pizza made with Papa John's traditional fresh dough. It is the company's first airport location to serve this product.