We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Papa John's (PZZA) Q4 Earnings Top, Revenues Lag; Stock Down
Read MoreHide Full Article
Shares of Papa John’s International, Inc. (PZZA - Free Report) declined nearly 4% in after-hour trading on Feb 21, after the company reported mixed fourth-quarter 2016 results. Though earnings beat the Zacks Consensus Estimate, revenues missed the same.
Earnings and Revenue Discussion
Adjusted earnings of 69 cents per share beat the Zacks Consensus Estimate of 66 cents by 4.5%. Moreover, earnings increased 11.3% year over year owing to higher revenues.
Revenues of $439.6 million failed to surpass the consensus mark of $445.8 million by 1.4%. However, revenues increased 5.5% year over year. The upside reflects higher domestic company-owned restaurant sales, increase in North America franchise royalties and fees, improved North America commissary and other sales along with higher international revenues.
Behind the Headline Numbers
Global restaurant sales growth of 5.3% in the fourth quarter was better than the year-ago growth of 3.4%, but lower than 7.6% in the prior quarter.
Excluding foreign currency impact, global restaurant sales growth was 7%, which was also better than the year-ago comps growth of 5.7%, but lower than the prior-quarter growth of 8.9%.
Domestic company-owned restaurant sales were up 7.2%, primarily due to a 3.2% increase in equivalent units and a 4.8% rise in comparable sales. North America franchise royalties and fees were up 6.3% driven by a 3.4% rise in comparable sales and reduced levels of royalty incentives in 2016. North America commissary and other sales were up 2.9% on the back of higher commissary sales.
Comps at system-wide North American restaurants were up 3.8%, higher than 1.9% comps growth in the year-ago quarter, but lower than the 5.5% growth last quarter.
International revenues were up 8.9% year over year primarily due to higher royalties and commissary sales, somewhat offset by lower company-owned restaurant sales in China. Currency affected international revenues by $4.5 million. Comps at system-wide international restaurants increased 5.6%, better than comps growth of 5.3% a year ago, but weaker than 7.6% growth in the preceding quarter.
Papa John's International, Inc. Price, Consensus and EPS Surprise
Papa John’s full-year adjusted earnings of $2.55 topped the Zacks Consensus Estimate of $2.53 by 0.8%. Moreover, it increased 22% from the year-ago quarter figure of $2.09 on the back of higher revenues.
Full-year revenues of $1.71 billion slightly missed the Zacks Consensus Estimate of $1.72 billion, but increased 4.7% year over year.
Guidance for 2017
For 2017, Papa John’s expects adjusted earnings per share to grow in the range of 8% to 12%.
North America system-wide comps are projected to rise in the band of 2% to 4%. Meanwhile, international comps are expected to be up in a range of 4% to 6%, in 2017.
Capital expenditures are expected to range between $45 and $55 million.
The company expects net global new unit to grow in the range of 4–5%, with majority of the growth coming in the second half of year.
Zacks Rank & Stocks to Consider
Papa John’s holds a Zacks Rank #2 (Buy). Other favourably-placed stocks in this sector include Dave & Buster's Entertainment, Inc. (PLAY - Free Report) , Potbelly Corporation (PBPB - Free Report) and Darden Restaurants, Inc. (DRI - Free Report) . While Dave & Buster's and Potbelly sport a Zacks Rank #1 (Strong Buy), Darden carries the same Zacks Rank as Papa John’s. You can see the complete list of today’s Zacks #1 Rank stocks here.
Dave & Buster's earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, with an average beat of 37.81%. Meanwhile, for fiscal 2017, EPS is expected to improve 35.1%.
The Zacks Consensus Estimate for Potbelly’s 2017 earnings climbed 2.2% over the past 30 days. The company’s earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, with an average beat of 39.82%.
Darden’s earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, with an average beat of 2.57%. Further, for fiscal 2017, EPS is expected to grow 11.1%.
Zacks' Top Investment Ideas for Long-Term Profit
How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Papa John's (PZZA) Q4 Earnings Top, Revenues Lag; Stock Down
Shares of Papa John’s International, Inc. (PZZA - Free Report) declined nearly 4% in after-hour trading on Feb 21, after the company reported mixed fourth-quarter 2016 results. Though earnings beat the Zacks Consensus Estimate, revenues missed the same.
Earnings and Revenue Discussion
Adjusted earnings of 69 cents per share beat the Zacks Consensus Estimate of 66 cents by 4.5%. Moreover, earnings increased 11.3% year over year owing to higher revenues.
Revenues of $439.6 million failed to surpass the consensus mark of $445.8 million by 1.4%. However, revenues increased 5.5% year over year. The upside reflects higher domestic company-owned restaurant sales, increase in North America franchise royalties and fees, improved North America commissary and other sales along with higher international revenues.
Behind the Headline Numbers
Global restaurant sales growth of 5.3% in the fourth quarter was better than the year-ago growth of 3.4%, but lower than 7.6% in the prior quarter.
Excluding foreign currency impact, global restaurant sales growth was 7%, which was also better than the year-ago comps growth of 5.7%, but lower than the prior-quarter growth of 8.9%.
Domestic company-owned restaurant sales were up 7.2%, primarily due to a 3.2% increase in equivalent units and a 4.8% rise in comparable sales. North America franchise royalties and fees were up 6.3% driven by a 3.4% rise in comparable sales and reduced levels of royalty incentives in 2016. North America commissary and other sales were up 2.9% on the back of higher commissary sales.
Comps at system-wide North American restaurants were up 3.8%, higher than 1.9% comps growth in the year-ago quarter, but lower than the 5.5% growth last quarter.
International revenues were up 8.9% year over year primarily due to higher royalties and commissary sales, somewhat offset by lower company-owned restaurant sales in China. Currency affected international revenues by $4.5 million. Comps at system-wide international restaurants increased 5.6%, better than comps growth of 5.3% a year ago, but weaker than 7.6% growth in the preceding quarter.
Papa John's International, Inc. Price, Consensus and EPS Surprise
Papa John's International, Inc. Price, Consensus and EPS Surprise | Papa John's International, Inc. Quote
2016 Results
Papa John’s full-year adjusted earnings of $2.55 topped the Zacks Consensus Estimate of $2.53 by 0.8%. Moreover, it increased 22% from the year-ago quarter figure of $2.09 on the back of higher revenues.
Full-year revenues of $1.71 billion slightly missed the Zacks Consensus Estimate of $1.72 billion, but increased 4.7% year over year.
Guidance for 2017
For 2017, Papa John’s expects adjusted earnings per share to grow in the range of 8% to 12%.
North America system-wide comps are projected to rise in the band of 2% to 4%. Meanwhile, international comps are expected to be up in a range of 4% to 6%, in 2017.
Capital expenditures are expected to range between $45 and $55 million.
The company expects net global new unit to grow in the range of 4–5%, with majority of the growth coming in the second half of year.
Zacks Rank & Stocks to Consider
Papa John’s holds a Zacks Rank #2 (Buy). Other favourably-placed stocks in this sector include Dave & Buster's Entertainment, Inc. (PLAY - Free Report) , Potbelly Corporation (PBPB - Free Report) and Darden Restaurants, Inc. (DRI - Free Report) . While Dave & Buster's and Potbelly sport a Zacks Rank #1 (Strong Buy), Darden carries the same Zacks Rank as Papa John’s. You can see the complete list of today’s Zacks #1 Rank stocks here.
Dave & Buster's earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, with an average beat of 37.81%. Meanwhile, for fiscal 2017, EPS is expected to improve 35.1%.
The Zacks Consensus Estimate for Potbelly’s 2017 earnings climbed 2.2% over the past 30 days. The company’s earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, with an average beat of 39.82%.
Darden’s earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, with an average beat of 2.57%. Further, for fiscal 2017, EPS is expected to grow 11.1%.
Zacks' Top Investment Ideas for Long-Term Profit
How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>