PZZA - Papa John's rallies after backing unit growth target

2023-05-04 10:34:01 ET

Papa John's International ( NASDAQ: PZZA ) broke higher in Thursday morning trading after a slight profit beat with its Q1 earnings report and reiterated guidance for 1.4K to 1.8K net new restaurant unit additions by 2025.

Global system-wide restaurant sales were up 2% to $1.24B.

North America comparable sales were flat for the quarter as they ran up against a comparable from a year ago when record sales were tallied. Menu innovation and operational efficiencies drove 3% growth in domestic company-owned restaurants, while international comparable sales were down 6% from a year ago primarily due to continued economic pressure in the UK.

Operating income was $37.8M for the quarter vs. $13.4M a year ago. The increase primarily due to the impact of $30.8M in certain charges incurred in the quarter a year ago. Adjusted operating income was $39.2M vs. $45.3M a year ago. The decrease in adjusted operating income was driven by higher costs resulting from commodity and wage inflation and reduced International operating income primarily in the UK. The decreases were partially offset by increased revenues from domestic company-owned restaurants.

CEO update: "Papa Johns remains a sought-after brand both domestically and internationally driven by the strong underlying long-term fundamentals of our franchisee model, and attractive franchisee payback and unit economics. We continue on our path to achieve our long-term unit growth targets as we execute our plan to build the world’s best pizza company."

Shares of Papa John's ( PZZA ) gained 3.73% in morning trading to $78.09 following the report.

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