Papa John's Q2 Results: Strategic Closures And EPS Beat Drive Stock Higher

On Thursday, Papa John’s International, Inc. PZZA reported a second-quarter fiscal 2024 decline of 1.3% year-over-year to $507.894 million, missing the consensus of $520.519 million.

The company reported adjusted earnings per share of 61 cents, beating the street view of 53 cents.

North America comparable sales were down 4%, and International comparable sales were flat. The second quarter saw 31 net unit closures due to planned strategic international closures, including 43 company-owned restaurants in the U.K.

Global system-wide restaurant sales were $1.20 billion, down 1% from last year, mainly due to lower North America comparable sales, partly offset by net unit growth.

Adjusted operating income of $38 million increased 4% on improved restaurant-level margins and continued focus on cost discipline.

The company’s net cash provided by operating activities for the six months ended June 30 totaled $41.96 million, down from $93.73 million a year ago. Free cash flow stood at $12.8 million.

The company paid cash dividends of $15.1 million in the second quarter of 2024. The company’s third-quarter dividend of $0.46 per common share will be paid on August 30 to stockholders of record on August 19. As of June-end, there were 5,883 Papa Johns restaurants operating in 49 countries and territories.

“Papa Johns’ commitment to maintaining the quality of our product and brand as well as managing our costs drove continued improvement in restaurant-level margins and Adjusted operating income, helping to offset our softer sales in the second quarter. During the quarter, demand for our core product — pizza, remained solid despite facing a highly promotional QSR environment and a more value-conscious consumer,” commented Ravi Thanawala, Chief Financial Officer.

“We are actively pursuing opportunities that sharpen our focus, improve unit economics, drive unit development and provide an excellent consumer experience,” added Thanawala.

Price Action: PZZA shares are trading higher by 4.50% at $44.40 at the last check Thursday.

Photo by Don Sniegowski via Flickr

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