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Papa John's (PZZA) Q2 Earnings Beat Estimates, Increase Y/Y
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Papa John’s International, Inc. (PZZA - Free Report) reported mixed second-quarter 2020 results, wherein earnings beat the Zacks Consensus Estimate, while revenues missed the same. The top and the bottom line increased on a year-over-year basis.
Adjusted earnings of 48 cents per share surpassed the Zacks Consensus Estimate of 40 cents by 20% and increased 300% from 16 cents reported in the prior-year quarter.
During the second quarter, total revenues of $460.6 million missed the Zacks Consensus Estimate of $463.9 million by 0.7%. However, the top line grew 15.3% on a year-over-year basis. Notably, the upside can be attributed to positive comparable sales in North America, higher royalties and commissary revenues from the United Kingdom as well as increased marketing fund revenues on an increase in national marketing fund contribution rate and higher online revenues.
Papa Johns International, Inc. Price, Consensus and EPS Surprise
In the second quarter, global restaurant sales rose 19.1% against the year-ago quarter’s fall of 3.8%. Excluding foreign currency impact, global restaurant sales rose 20.8% against the year-ago quarter’s decline of 2.6%.
Domestic company-owned restaurant comps moved up 22.6% in the reported quarter against a 6.8% decline in the year-ago quarter.
At North America franchised restaurants, comps rose 29.7% against a decline of 5.3% in second-quarter 2019. Also, comps at system-wide North America restaurants improved 28% against a 5.7% decline seen in the year-ago quarter.
Comps at system-wide international restaurants were up 5.3% compared with 0.3% growth in the prior-year quarter.
Nonetheless, for the first month of the third quarter (Jun 29-Jul 26, 2020), comparable sales at domestic company-owned, North America franchised and systemwide North America restaurants are estimated to grow 23.6%, 32.4% and 30.3%, year over year, respectively. Comps at system-wide international restaurants are estimated to grow 13.9% year over year.
Operating Highlights
Total operating income in the second quarter was $30.5 million compared with $14.2 million in the year-ago quarter. Total costs and expenses amounted to $430.1 million, up 11.6% from the prior-year quarter.
Balance Sheet
As of Jun 28, 2020, cash and cash equivalents totaled $75.7 million compared with $27.9 million as on Dec 29, 2019. Long-term debt was $327.9 million at the end of first-quarter 2020 compared with $347.3 million at 2019-end.
Inventories at the end of the reported quarter increased to $32.5 million from $27.5 million on Dec 29, 2019. Free cash flow for the six months ended Jun 28, 2020, summed $67 million compared with $8.9 million in the year-ago period.
The company paid out cash dividends worth $10.7 million in second-quarter 2020 and announced third-quarter 2020 cash dividend of approximately $10.8 million. The third-quarter dividend will be payable on Oct 1, 2020.
Unit Developments
During the second quarter, Papa John’s opened nine restaurants in North America and exited 10, with the global restaurant count being 5,347. Currently, the company is operating in 48 countries and territories worldwide.
Other top-ranked stocks in the same space include Domino's Pizza, Inc. (DPZ - Free Report) , Jack in the Box Inc. (JACK - Free Report) and El Pollo Loco Holdings, Inc. (LOCO - Free Report) , each carrying a Zacks Rank #2.
Domino's has a trailing four-quarter earnings surprise of 18.6%, on average.
Jack in the Box has a three-five year earnings per share growth rate of 9.2%.
Earnings in 2021 for El Pollo Loco are expected to rise 7.9%.
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Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.3% per year.
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Papa John's (PZZA) Q2 Earnings Beat Estimates, Increase Y/Y
Papa John’s International, Inc. (PZZA - Free Report) reported mixed second-quarter 2020 results, wherein earnings beat the Zacks Consensus Estimate, while revenues missed the same. The top and the bottom line increased on a year-over-year basis.
Adjusted earnings of 48 cents per share surpassed the Zacks Consensus Estimate of 40 cents by 20% and increased 300% from 16 cents reported in the prior-year quarter.
During the second quarter, total revenues of $460.6 million missed the Zacks Consensus Estimate of $463.9 million by 0.7%. However, the top line grew 15.3% on a year-over-year basis. Notably, the upside can be attributed to positive comparable sales in North America, higher royalties and commissary revenues from the United Kingdom as well as increased marketing fund revenues on an increase in national marketing fund contribution rate and higher online revenues.
Papa Johns International, Inc. Price, Consensus and EPS Surprise
Papa Johns International, Inc. price-consensus-eps-surprise-chart | Papa Johns International, Inc. Quote
Global Restaurant Sales & Comps
In the second quarter, global restaurant sales rose 19.1% against the year-ago quarter’s fall of 3.8%. Excluding foreign currency impact, global restaurant sales rose 20.8% against the year-ago quarter’s decline of 2.6%.
Domestic company-owned restaurant comps moved up 22.6% in the reported quarter against a 6.8% decline in the year-ago quarter.
At North America franchised restaurants, comps rose 29.7% against a decline of 5.3% in second-quarter 2019. Also, comps at system-wide North America restaurants improved 28% against a 5.7% decline seen in the year-ago quarter.
Comps at system-wide international restaurants were up 5.3% compared with 0.3% growth in the prior-year quarter.
Nonetheless, for the first month of the third quarter (Jun 29-Jul 26, 2020), comparable sales at domestic company-owned, North America franchised and systemwide North America restaurants are estimated to grow 23.6%, 32.4% and 30.3%, year over year, respectively. Comps at system-wide international restaurants are estimated to grow 13.9% year over year.
Operating Highlights
Total operating income in the second quarter was $30.5 million compared with $14.2 million in the year-ago quarter. Total costs and expenses amounted to $430.1 million, up 11.6% from the prior-year quarter.
Balance Sheet
As of Jun 28, 2020, cash and cash equivalents totaled $75.7 million compared with $27.9 million as on Dec 29, 2019. Long-term debt was $327.9 million at the end of first-quarter 2020 compared with $347.3 million at 2019-end.
Inventories at the end of the reported quarter increased to $32.5 million from $27.5 million on Dec 29, 2019. Free cash flow for the six months ended Jun 28, 2020, summed $67 million compared with $8.9 million in the year-ago period.
The company paid out cash dividends worth $10.7 million in second-quarter 2020 and announced third-quarter 2020 cash dividend of approximately $10.8 million. The third-quarter dividend will be payable on Oct 1, 2020.
Unit Developments
During the second quarter, Papa John’s opened nine restaurants in North America and exited 10, with the global restaurant count being 5,347. Currently, the company is operating in 48 countries and territories worldwide.
Zacks Rank & Other Key Picks
Papa John's currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Other top-ranked stocks in the same space include Domino's Pizza, Inc. (DPZ - Free Report) , Jack in the Box Inc. (JACK - Free Report) and El Pollo Loco Holdings, Inc. (LOCO - Free Report) , each carrying a Zacks Rank #2.
Domino's has a trailing four-quarter earnings surprise of 18.6%, on average.
Jack in the Box has a three-five year earnings per share growth rate of 9.2%.
Earnings in 2021 for El Pollo Loco are expected to rise 7.9%.
Just Released: Zacks’ 7 Best Stocks for Today
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.3% per year.
These 7 were selected because of their superior potential for immediate breakout.
See these time-sensitive tickers now >>