Papa John's Earns Less Dough As Q3 Sales Dip, CEO Blames 'Challenging Consumer Environment'

Papa John’s International, Inc. PZZA shares are trading lower on Thursday.

The company reported adjusted earnings per share of 43 cents, in line with the street view. Quarterly sales of $506.81 million (down 3.1%) beat the analyst consensus estimate of $497.27 million.

“During the third quarter, we delivered earnings in line with our expectations in what continues to be a very challenging consumer environment,” said Papa John’s CEO Todd Penegor.

The lower revenues were mainly due to a $9.9 million decrease in international revenues from UK restaurants, an $8.5 million drop in domestic restaurant sales from lower transaction volumes, and a $4.8 million decrease from the sale of Preferred Marketing, the former print and promotions company.

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North America comparable sales were down 6% from a year ago. Domestic Company-owned restaurants were down 7%, and North America franchised restaurants were down 5%. International comparable sales were down 3% compared to the previous year.

Adjusted operating income was $29.3 million, a $4.3 million, or 12.9%, decrease from the same period a year ago.

The decrease in adjusted operating income for was mainly due to lower margins at Domestic Company-owned restaurants. This was because the company strategically reinvested some of its first-half savings to improve consumer value perception.

As of Sept. 29, there were 5,908 Papa Johns restaurants operating in 49 countries and territories.

Dividend: On Oct. 29, the firm declared a fourth-quarter dividend of 46 cents per common share. The dividend will be paid on November 29 to stockholders of record as of the close of business on November 18.

In a separate press release, the company announced the appointment of Jenna Bromberg to chief marketing officer, effective Nov. 14.

Price Action: PZZA shares are trading lower by 2.44% to $56.85 at last check Thursday.

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