Papa John's International Inc.
) reported fourth quarter 2012 earnings of 74 cents per share,
missing the Zacks Consensus Estimate by 2 cents. However, the
result surpassed the year-ago earnings of 65 cents per share. In
2012, the company posted earnings of $2.58 per share versus $2.16
in the prior year.
Total revenues jumped 19.9% year over year to $367.3 million
and surpassed the Zacks Consensus Estimate of $348 million. The
annual improvement was attributable to higher comparable
restaurant revenues in both domestic and international markets
and increase in number of units worldwide. In 2012, revenues were
$1.3 billion, up 10.2% year over year.
Behind the Headline Numbers
Comparable system-wide restaurant revenues rose 5.2% and 7.0%
in North America and in the international markets, respectively.
Domestic company-owned restaurant revenues improved 23.6% to
$161.6 million, signifying an increase of 6.9% in comparable
revenues and acquisition activity during the quarter.
Hike in net franchised units along with comparable franchised
restaurants' revenues growth of 4.6% resulted in an 18.3% rise in
North America franchise royalty revenues to $21.2 million.
Domestic commissaries revenues upped 15.9% year over year to
$149.1 million, primarily due to a rise in sales volume.
International revenues surged 29.1% year over year to $20.7
million, due to higher number of restaurants opened and
comparable revenues growth.
In the quarter under review, Papa John's company-owned
restaurant expenses and domestic commissary and other expenses
rose 22.2% to $129.8 million and 17.9% to $128.4 million,
respectively. General and administrative (G&A) expenses hiked
38.1% year over year to $38.1 million. Operating income also
rocketed 14.0% year over year to $27.0 million.
During the quarter, the company opened 156 restaurants and
closed 22 units, representing a 7.2% increase worldwide. As of
Dec 30, 2012, Papa John's had 4,163 restaurants in 50 states
across 35 countries.
At quarter end, Papa John's had cash and cash equivalents of
$16.4 million. The long-term debt and shareholders' equity stood
at $88.3 million and $181.5 million, respectively.
During the reported quarter, the company repurchased 804,000
shares worth $41.9 million and also bought back 2.3 million
shares worth $106.1 million in 2012. In the fourth quarter, the
company approved the buy back of an additional $100 million
shares under its existing share repurchase program.
Papa John's expects full-year 2013 earnings per share in the
range of $2.85 to $2.95, up nearly 10% to 14% year over year.
North America system-wide comparable revenues are projected to
increase in the range of 1.5% to 2.5%. International comparable
revenues are expected to increase in the range of 5.0% to 7.0% in
Moreover, international restaurants' sales are likely to grow
by 20%-25% on the back of unit growth and comps improvement.
Worldwide net unit is expected to grow within 230 and 260.
Further, the company anticipated that total revenue growth will
be in the range of 6% to 7% with the rise in number of units and
comps growth. Consolidated pre-tax income margin will be nearly
in line with the prior year.
We remain encouraged by the company's long and successful
track record, robust unit and comps growth and viable business
strategy. However, growing competition within the restaurant
industry is a huge matter of concern.
Papa John's retains a Zacks Rank #3 (Hold). Another
AFC Enterprises Inc.
) recently declared its preliminary fourth quarter and full year
2012 results. The company projects its adjusted earnings per
share for the full year of 2012 to be within $1.23-$1.24, up from
99 cents in 2011. AFC also provided an optimistic outlook for
2013. AFC currently holds a Zacks Rank #2 (Buy).
Other restaurateurs, which are expected to perform well moving
Krispy Kreme Doughnuts, Inc.
Burger King Worldwide, Inc.
). Both carry a Zacks Rank #2 (Buy).
AFC ENTERPRISES (AFCE): Free Stock Analysis
BURGER KING WWD (BKW): Free Stock Analysis
KRISPY KREME (KKD): Free Stock Analysis
PAPA JOHNS INTL (PZZA): Free Stock Analysis
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