OLD Media News

Papa John’s Q4 earnings beat forecasts

Pizza chain Papa John’s reported stronger than expected earnings for the fourth quarter of 2019 but shares fell on China store closures.

Heidi Chung had the news for Yahoo Finance:

Papa John’s (PZZA) on Wednesday delivered a fourth quarter earnings beat on the top and bottom lines, boosted by strong same-store sales amid a turnaround strategy to reinvigorate the brand.

Here were the main numbers for Papa John’s fourth quarter, compared to Bloomberg estimates:

  • Revenue: $417.5 million vs. $403.8 million expected
  • Adj. earnings per share: 37 cents vs. 32 cents expected
  • U.S. same-store sales: +4.1% vs. +2.3% expected

On Nov. 6, the pizza chain announced a big management shake-up meant to stabilize the company after a turbulent period sparked by the messy ouster of its founder, John Schnatter. Papa John’s described the overhaul as a way to promote a “new, more streamlined senior management team…[that] aligns with the company’s new strategy and priorities.”

Ahead of its fourth quarter earnings report, Papa John’s stock has risen 60% over the past 12 months — outperforming a broader market that’s jumped nearly 12% in the same time period. The stock, which closed lower on Tuesday at $67.35, rose in pre-market trading.

CNBC’s Kate Rogers focused on the coronavirus-linked share price news:

Papa John’s shares tumbled more than 10% Wednesday after the company said it has temporarily closed 50 franchised stores in China as a result of the coronavirus and reported a decline in same-store sales for the year.

The company has seen a countrywide sales impact year to date, with sales in China down mid- to low double digits year over year, CEO Rob Lynch said in an interview with CNBC.

And while the company reported its second straight quarter of same-store sales growth in North America with an increase of 3.5%, full-year same-store sales growth in the region still fell 2.2%. Meanwhile the company is grappling with an increasingly competitive fast food landscape where food beyond pizza is readily available for delivery at the drop of a hat.

Shares were down 10.5% to $60.41 in midday trading, and closed down nearly 9%.

“Almost 10% of our international footprint is in China, and we are doing everything we can to support our franchisees and our teams in that region,” Lynch said.

Lynch said Wednesday on “Closing Bell” he was surprised by the sell-off in the company’s stock. “We feel like our business is in great shape. We’re in full turnaround mode,” he said.

Irina Slav

Recent Posts

Dynamo hires former Business Insider executive editor Harrington

Former Business Insider executive editor Rebecca Harrington has been hired by Dynamo to be its…

2 days ago

Bloomberg TV hires Kerubo as desk producer

Bloomberg Television has hired Brenda Kerubo as a desk producer in London. She will be covering Europe's…

2 days ago

Jittery CNBC staff reassured by new boss

In a meeting at CNBC headquarters Thursday afternoon, incoming boss Mark Lazarus presented a bullish…

2 days ago

Making business news accessible to a wider audience

Ritika Gupta, the BBC's North American business correspondent, was interviewed by Global Woman magazine about…

2 days ago

Rest of World hires Lo as China reporter

Rest of World has hired Kinling Lo as a China reporter. Lo was previously a…

2 days ago

Bloomberg rises to No. 7 biz news website

Bloomberg News saw strong unique visitor growth to its website in October, passing Fox Business…

2 days ago