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Papa John's (PZZA) Q1 Earnings Beat Estimates, Revenues Lag
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Papa John’s International, Inc. (PZZA - Free Report) reported mixed first-quarter 2023 results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. The top and the bottom line declined on a year-over-year basis.
During the quarter, the company benefited from the Back to BETTER initiative. The program focuses on improving execution at the store level, paving the path for improvements in out-the-door times, operational efficiencies and overall customer satisfaction and mitigate inflationary pressures. Moreover, the emphasis on marketing and menu innovation strategy added to the positives. Following the results, shares of the company moved up 1.7% during trading hours on May 5.
Earnings & Revenue Discussion
During the fiscal first quarter, the company reported adjusted earnings per share (EPS) of 68 cents, beating the Zacks Consensus Estimate of 66 cents. In the prior-year quarter, the company reported an adjusted EPS of 95 cents.
Quarterly revenues of $527 million missed the consensus mark of $534 million by 1.3%. The top line dropped 2.9% on a year-over-year basis.
Papa John's International, Inc. Price, Consensus and EPS Surprise
In the fiscal first quarter, total comparable sales declined 1.3% year over year against growth of 1.6% reported in the prior-year quarter. Domestic company-owned restaurant comps in the quarter under review increased 3.4% year over year against a decline of 1.2% reported in the year-ago quarter.
At North America franchised restaurants, comps fell 0.8% year over year compared against a rise of 2.8% reported in the year-ago quarter. Comps growth at North America restaurants came in at breakeven compared with a 1.9% growth in the year-ago quarter. Comps at international restaurants were down 5.8% year over year against growth of 0.8% reported in the prior-year quarter.
During the fiscal first quarter, total global system-wide restaurant sales growth came in at 2% year over year compared with a 5.3% rise reported in the prior-year quarter.
Operating Highlights
Adjusted operating income in the fiscal first quarter totaled $39.2 million compared with $45.2 million reported in the year-ago quarter. During the quarter under review, total costs and expenses amounted to $489.3 million compared with $517.1 million reported in the prior-year quarter.
Balance Sheet
As of Mar 26, 2023, cash and cash equivalents totaled $46.7 million compared with $47.4 million as of Dec 25, 2022. At the end of the fiscal first quarter, the long-term debt net totaled $797.4 million compared with $597.1 million at the end of the fourth quarter of fiscal 2022.
Inventories as of Mar 26, 2023, were $37.1 million compared with $41.4 million on Dec 25, 2022. Free cash flow (as on Mar 26, 2024) totaled $22.4 million compared with $15.2 million reported in the prior-year period.
During the quarter under review, the company repurchased 2.5 million shares with an aggregate cost of $209.6 million. As of Mar 26, the company stated the availability of approximately $90.2 million under its repurchase program.
Unit Developments
During the fiscal first quarter, Papa John’s opened eight net new restaurants in North America. In the international markets, the company opened 19 net new restaurants. As of Mar 26, the company had a global restaurant count of 5,733, with operations in 48 countries and territories worldwide.
Zacks Rank & Key Picks
Papa John’s currently carries a Zacks Rank #3 (Hold).
Arcos Dorados currently sports a Zacks Rank #1 (Strong Buy). ARCO has a long-term earnings growth rate of 7.2%. The stock has gained 15.1% in the past year. You can see the complete list of today’s Zacks Rank #1 stocks here.
The Zacks Consensus Estimate for Arcos Dorados’ 2023 sales suggests growth of 13.4% from the year-ago period’s levels.
Chipotle carries a Zacks Rank #1. CMG has a long-term earnings growth rate of 31.8%. The stock has improved 50.1% in the past year.
The Zacks Consensus Estimate for Chipotle’s 2024 sales and EPS suggests growth of 12.4% and 20%, respectively, from the year-ago period’s levels.
Chuy’s Holdings carries a Zacks Rank #2 (Buy). CHUY has a trailing four-quarter earnings surprise of 23.4%, on average. Shares of CHUY have increased 43.3% in the past year.
The Zacks Consensus Estimate for Chuy’s Holdings 2023 sales and EPS suggests growth of 10.9% and 19%, respectively, from the year-ago period’s levels.
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Papa John's (PZZA) Q1 Earnings Beat Estimates, Revenues Lag
Papa John’s International, Inc. (PZZA - Free Report) reported mixed first-quarter 2023 results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. The top and the bottom line declined on a year-over-year basis.
During the quarter, the company benefited from the Back to BETTER initiative. The program focuses on improving execution at the store level, paving the path for improvements in out-the-door times, operational efficiencies and overall customer satisfaction and mitigate inflationary pressures. Moreover, the emphasis on marketing and menu innovation strategy added to the positives. Following the results, shares of the company moved up 1.7% during trading hours on May 5.
Earnings & Revenue Discussion
During the fiscal first quarter, the company reported adjusted earnings per share (EPS) of 68 cents, beating the Zacks Consensus Estimate of 66 cents. In the prior-year quarter, the company reported an adjusted EPS of 95 cents.
Quarterly revenues of $527 million missed the consensus mark of $534 million by 1.3%. The top line dropped 2.9% on a year-over-year basis.
Papa John's International, Inc. Price, Consensus and EPS Surprise
Papa John's International, Inc. price-consensus-eps-surprise-chart | Papa John's International, Inc. Quote
Global Restaurant Sales & Comps
In the fiscal first quarter, total comparable sales declined 1.3% year over year against growth of 1.6% reported in the prior-year quarter. Domestic company-owned restaurant comps in the quarter under review increased 3.4% year over year against a decline of 1.2% reported in the year-ago quarter.
At North America franchised restaurants, comps fell 0.8% year over year compared against a rise of 2.8% reported in the year-ago quarter. Comps growth at North America restaurants came in at breakeven compared with a 1.9% growth in the year-ago quarter. Comps at international restaurants were down 5.8% year over year against growth of 0.8% reported in the prior-year quarter.
During the fiscal first quarter, total global system-wide restaurant sales growth came in at 2% year over year compared with a 5.3% rise reported in the prior-year quarter.
Operating Highlights
Adjusted operating income in the fiscal first quarter totaled $39.2 million compared with $45.2 million reported in the year-ago quarter. During the quarter under review, total costs and expenses amounted to $489.3 million compared with $517.1 million reported in the prior-year quarter.
Balance Sheet
As of Mar 26, 2023, cash and cash equivalents totaled $46.7 million compared with $47.4 million as of Dec 25, 2022. At the end of the fiscal first quarter, the long-term debt net totaled $797.4 million compared with $597.1 million at the end of the fourth quarter of fiscal 2022.
Inventories as of Mar 26, 2023, were $37.1 million compared with $41.4 million on Dec 25, 2022. Free cash flow (as on Mar 26, 2024) totaled $22.4 million compared with $15.2 million reported in the prior-year period.
During the quarter under review, the company repurchased 2.5 million shares with an aggregate cost of $209.6 million. As of Mar 26, the company stated the availability of approximately $90.2 million under its repurchase program.
Unit Developments
During the fiscal first quarter, Papa John’s opened eight net new restaurants in North America. In the international markets, the company opened 19 net new restaurants. As of Mar 26, the company had a global restaurant count of 5,733, with operations in 48 countries and territories worldwide.
Zacks Rank & Key Picks
Papa John’s currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Zacks Retail-Wholesale sector are Arcos Dorados Holdings Inc. (ARCO - Free Report) , Chipotle Mexican Grill, Inc. (CMG - Free Report) and Chuy's Holdings, Inc. (CHUY - Free Report) .
Arcos Dorados currently sports a Zacks Rank #1 (Strong Buy). ARCO has a long-term earnings growth rate of 7.2%. The stock has gained 15.1% in the past year. You can see the complete list of today’s Zacks Rank #1 stocks here.
The Zacks Consensus Estimate for Arcos Dorados’ 2023 sales suggests growth of 13.4% from the year-ago period’s levels.
Chipotle carries a Zacks Rank #1. CMG has a long-term earnings growth rate of 31.8%. The stock has improved 50.1% in the past year.
The Zacks Consensus Estimate for Chipotle’s 2024 sales and EPS suggests growth of 12.4% and 20%, respectively, from the year-ago period’s levels.
Chuy’s Holdings carries a Zacks Rank #2 (Buy). CHUY has a trailing four-quarter earnings surprise of 23.4%, on average. Shares of CHUY have increased 43.3% in the past year.
The Zacks Consensus Estimate for Chuy’s Holdings 2023 sales and EPS suggests growth of 10.9% and 19%, respectively, from the year-ago period’s levels.