Papa John's International, Inc
) reported first quarter 2012 adjusted earnings of 79 cents per
share, comprehensively beating the Zacks Consensus Estimate of 55
cents and year-ago earnings of 64 cents per share. On a reported
quarterly earnings upped 7.8% year over year to 69 cents per
In the first quarter of 2012, Papa John's reported a 6.0%
year-over-year increase in total revenue to $331.3 million. The
revenue increase was driven by higher comparable restaurant
revenues in both domestic and international markets and increase in
number of units. Comparable restaurant revenue rose 1.1% and 8.4%
in North America and in the international markets respectively.
In the first quarter 2012, Domestic company-owned restaurant
revenue improved 3.7%, signifying an increase of 3.0% in comparable
sales. Hike in net franchise units resulted in a 4.0% rise in North
America franchise royalty revenue. Domestic commissaries revenue
escalated 7.8%, primarily due to a hike in sales volume and prices
of some commodities. However, the upside in revenue was partially
offset by a dip of 8.8% in other sales. International revenues
surged 32.4%, due to higher number of restaurants opened and
comparable sales growth of 8.4% on constant dollar basis.
In the quarter under review, Papa John's saw a spike in overall
cost structure. Company-owned restaurant expenses and General and
administrative (G&A) expenses rose 1.8% and 8.7%, respectively.
Hence, operating income remained flat year over year at $27.3
Consistent with its unit growth momentum, Papa John's opened 70
restaurants and closed 20 restaurants, representing a 1.3% increase
on worldwide basis. By the next six years, the company expects to
open approximately 1500 restaurants, including 300 in North America
and 1200 in the international market.
Acquisition and Disposition Activity
Papa John's acquired 56 franchised restaurants in the Denver and
Minneapolis markets for $5.1 million. Subsequent to the
acquisitions, the company refranchised six restaurants.
At quarter end, Papa John's had cash and cash equivalents of
$45.1 million with long-term debt of $50 million and shareholder
equity of $227.8 million. During the quarter, the company also
repurchased 0.4 million shares for $13.8 million.
Papa John's expects full-year 2012 diluted earnings per share in
the range of $2.40-$2.50 up from previous projection of
$2.33-$2.43. One extra week of operation in fiscal 2012, will
benefit earnings by 8 cents to 10 cents per share. The
international comparable sales growth expectation has also been
raised from the range of 1.5%-3.5% to 2.5%- 4.5%. However, the
company reiterated its revenue growth outlook of 6% to 7% and North
America system-wide comparable sales growth of 1.5% to 2.5%.
We remain encouraged by the company's long and successful track
record, viable business strategy and strong balance sheet. The
company provides ample growth opportunities given its plan of
opening 300 restaurants in the North America and 1200 in the
international markets by the next six years.
One of Papa John's peer company
Yum! Brands Inc.
) recently reported first-quarter 2012 earnings of 76 cents per
share, surpassing the Zacks Consensus Estimate of 73 cents.
PAPA JOHNS INTL (PZZA): Free Stock Analysis
YUM! BRANDS INC (YUM): Free Stock Analysis
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