Papa John's Ups 2011 EPS Guidance - Analyst Blog

By Zacks Equity Research,

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Louisville, Kentucky-based Papa John's International, Inc ( PZZA ) recently raised its earnings per share ( EPS ) outlook for 2011 to $2.15 - $2.20 from the previous range of $2.08 - $2.15 (as announced during third quarter 2011 earnings release), as the company continues to perform remarkably.

Papa John's, the third largest take-out and delivery pizza restaurant chain in the United States, also revealed its financial outlook for 2012. The company is witnessing strong performance and expects to close the current year on a high. For 2012, the company projects EPS in the range of $2.33 to $2.43, implying a year-over-year growth of approximately 8% to 10%. The 2012 EPS estimate includes a one-time marketing incentive contribution of 11 cents. The fiscal year 2012 consists of 53 weeks, and this is expected to benefit EPS by 8 cents to 10 cents.

For 2012, the company anticipates total revenue to increase 6% to 7%, including a gain of 2% from one extra week of operation. North America system-wide comparable sales are forecasted to rise 1.5% to 2.5% as compared with the 2011 guidance of 3% to 4%. International comparable sales, on a constant-dollar basis, are expected to jump1.5% to 3.5% versus 2011 estimate of 3% to 5%. International sales are projected to grow in the range of 20% to 25%, primarily driven by unit as well as comparable sales growth.

The company continues to accelerate its unit growth mainly through franchising. In 2012, Papa John's expects to open 240 to 280 units including 110 to 130 units (up 4% year over year) in the domestic market and 130 to 150 ( up 17%) outlets in the international market.  For the remainder of 2011, the company is on track to open 210 to 235 units.

The company also remains committed to enhancing shareholders' value. The board of directors has approved an additional share repurchase authorization of $50 million to boost investors' wealth. With the approval, the total buyback authorization for 2012 totals $73.2 million.

This was quite encouraging; and as a result, the company's share price rose 68 cents to close at $37.75 on Wednesday.

In the recently concluded third quarter 2011, Papa John's reported earnings of 44 cents per share, which beat the Zacks Consensus Estimate of 41 cents. Total revenue jumped 11.9% to $305.7 million, benefiting from comp and unit growth. Global restaurant sales growth was 8.3%. 

The Zacks Consensus Estimates for fiscal 2011 and 2012 are pegged at $2.14 and $2.47, respectively. We expect estimates to go up in the coming days as the company has raised its outlook.

Papa John's, which competes with Yum! Brands Inc. ( YUM ) and Domino's Pizza, Inc. ( DPZ ), expects to report fourth quarter 2011 results on February 20, 2012.

DOMINOS PIZZA ( DPZ ): Free Stock Analysis Report
PAPA JOHNS INTL ( PZZA ): Free Stock Analysis Report
YUM! BRANDS INC ( YUM ): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
Referenced Stocks: DPZ , EPS , PZZA , YUM

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