PZZA - Papa John's shares slide despite dividend increase

Shares of Kentucky-based pizza chain Papa John’s ( NASDAQ: PZZA ) slipped after the company posted weaker-than-expected earnings on Thursday.

For the second quarter, the restaurant chain posted narrow misses on top and bottom lines as “acceleration in commodity costs and labor inflation” impacted earnings. Additionally, lower international sales reflected a weakening consumer across Europe, especially in the UK.

“Like companies across our industry and the global economy, we are experiencing high inflation coupled with lapping economic stimulus a year ago,” CEO Rob Lynch said.

Shares of the Louisville-based pizza chain fell 4.37% on Thursday.

Still, management remained confident that commodity costs and labor inflation can be contended with in the long term.

“While we expect these headwinds to persist into the second half of 2022, the targeted actions we are taking today are focused on optimizing results in the near term, while leaning into our differentiated strategy and securing our growing market share position for the long term,” Lynch commented.

Indicative of that confidence, the company announced a 20% increase in its annual dividend rate to $1.68 per share.

Read more on the details of the dividend increase .

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