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Papa John's (PZZA) Acquires Drake Food's Restaurants in UK
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Papa John's International, Inc. (PZZA - Free Report) has announced the acquisition of the M25 division of Drake Food Service International in the U.K. However, the financial terms of the deal have been kept under wraps.
The new restaurant portfolio will have 91 locations across London and other parts of UK. In an effort to enhance sales and restaurant-level profitability, the company is likely to implement operating model improvement, which includes revenue management abilities, product as well as technological innovation and operational efficiencies.
Amanda Clark, chief international and development officer for Papa John’s said “The U.K. is important within our international footprint with the largest number of stores outside of North America, strong brand awareness with consumers and potential for long-term growth as we still have tremendous whitespace in the market.”
The acquisition will help drive the company’s top line. Many of Papa John’s restaurants, located in the international markets like UK and Chile, continue to perform strongly. The upside can primarily be driven by the company’s optimized restaurant model, brand design enhancements and increased integration with third-party aggregators to boost its accessibility channels.
Image Source: Zacks Investment Research
Expansion Efforts to Drive Growth
Papa John’s is committed to developing and maintaining a strong franchise system. The company is continually striving to eliminate barriers to expansion in existing international markets and identify new market opportunities.
In recent years, Papa John’s has entered 15 new countries, including Spain, Portugal, Germany, Cambodia, Pakistan, France and Poland. During the fiscal fourth quarter, the company reported solid penetration in the Middle East and East Asian markets. It also marked its entry in Jordan with four new restaurants. During the first quarter of 2023, Papa John’s opened 16 net new restaurants in North America. In the international markets, the company opened 43 net new restaurants. As of Mar 26, 2023, the company had a global restaurant count of 5,733, with operations in 48 countries and territories worldwide.
Shares of the company have declined 12.6% in the past six months against the industry’s rise of 7.1%.
Zacks Rank & Key Picks
PZZA currently carries a Zacks Rank #3 (Hold).
Here are some better-ranked stocks from the Zacks Retail-Wholesale sector.
Chipotle Mexican Grill, Inc. (CMG - Free Report) has a long-term earnings growth rate of 31.8%. Shares of the company have risen 49.5% in the year-to-date period. CMG currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for CMG’s 2023 sales and EPS suggests growth of 14% and 33.9%, respectively, from the year-ago period’s reported levels.
Chuy's Holdings, Inc. (CHUY - Free Report) carries a Zacks Rank #2 (Buy) at present.CHUY has a trailing four-quarter earnings surprise of 23.4%, on average. Shares of the company have gained 37.6% in the year-to-date period.
The Zacks Consensus Estimate for CHUY’s 2023 sales and EPS suggests growth of 9.9% and 24.8%, respectively, from the year-ago period’s reported levels.
Arcos Dorados Holdings Inc. (ARCO - Free Report) currently carries a Zacks Rank #2. ARCO has a long-term earnings growth rate of 9.5%. Shares of the company have gained 4.7% in the year-to-date period.
The Zacks Consensus Estimate for ARCO’s 2023 sales and EPS suggests growth of 13.4% and 4.4%, respectively, from the year-ago period’s reported levels.
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Papa John's (PZZA) Acquires Drake Food's Restaurants in UK
Papa John's International, Inc. (PZZA - Free Report) has announced the acquisition of the M25 division of Drake Food Service International in the U.K. However, the financial terms of the deal have been kept under wraps.
The new restaurant portfolio will have 91 locations across London and other parts of UK. In an effort to enhance sales and restaurant-level profitability, the company is likely to implement operating model improvement, which includes revenue management abilities, product as well as technological innovation and operational efficiencies.
Amanda Clark, chief international and development officer for Papa John’s said “The U.K. is important within our international footprint with the largest number of stores outside of North America, strong brand awareness with consumers and potential for long-term growth as we still have tremendous whitespace in the market.”
The acquisition will help drive the company’s top line. Many of Papa John’s restaurants, located in the international markets like UK and Chile, continue to perform strongly. The upside can primarily be driven by the company’s optimized restaurant model, brand design enhancements and increased integration with third-party aggregators to boost its accessibility channels.
Image Source: Zacks Investment Research
Expansion Efforts to Drive Growth
Papa John’s is committed to developing and maintaining a strong franchise system. The company is continually striving to eliminate barriers to expansion in existing international markets and identify new market opportunities.
In recent years, Papa John’s has entered 15 new countries, including Spain, Portugal, Germany, Cambodia, Pakistan, France and Poland. During the fiscal fourth quarter, the company reported solid penetration in the Middle East and East Asian markets. It also marked its entry in Jordan with four new restaurants. During the first quarter of 2023, Papa John’s opened 16 net new restaurants in North America. In the international markets, the company opened 43 net new restaurants. As of Mar 26, 2023, the company had a global restaurant count of 5,733, with operations in 48 countries and territories worldwide.
Shares of the company have declined 12.6% in the past six months against the industry’s rise of 7.1%.
Zacks Rank & Key Picks
PZZA currently carries a Zacks Rank #3 (Hold).
Here are some better-ranked stocks from the Zacks Retail-Wholesale sector.
Chipotle Mexican Grill, Inc. (CMG - Free Report) has a long-term earnings growth rate of 31.8%. Shares of the company have risen 49.5% in the year-to-date period. CMG currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for CMG’s 2023 sales and EPS suggests growth of 14% and 33.9%, respectively, from the year-ago period’s reported levels.
Chuy's Holdings, Inc. (CHUY - Free Report) carries a Zacks Rank #2 (Buy) at present.CHUY has a trailing four-quarter earnings surprise of 23.4%, on average. Shares of the company have gained 37.6% in the year-to-date period.
The Zacks Consensus Estimate for CHUY’s 2023 sales and EPS suggests growth of 9.9% and 24.8%, respectively, from the year-ago period’s reported levels.
Arcos Dorados Holdings Inc. (ARCO - Free Report) currently carries a Zacks Rank #2. ARCO has a long-term earnings growth rate of 9.5%. Shares of the company have gained 4.7% in the year-to-date period.
The Zacks Consensus Estimate for ARCO’s 2023 sales and EPS suggests growth of 13.4% and 4.4%, respectively, from the year-ago period’s reported levels.