Papa John's International Inc (PZZA) Reports 2% Revenue Growth in Q3 2023
Papa John's International Inc (NASDAQ:PZZA) reported a 2% increase in total revenues, reaching $523 million in Q3 2023.
Operating income for the same period rose by 64%, amounting to $32 million.
North America comparable sales were up 3% compared to Q3 2022.
Diluted earnings per common share was $0.48, compared to $0.23 for the same period last year.
On November 2, 2023, Papa John's International Inc (NASDAQ:PZZA) released its financial results for the third quarter ended September 24, 2023. The company reported a 2% increase in total revenues, amounting to $523 million, driven by higher Domestic Company-owned restaurant sales and higher International revenues resulting from the consolidation of recently acquired restaurants in the UK.
Financial Performance
The company's operating income for Q3 2023 was $32 million, a significant increase of 64% from the third quarter of 2022. The diluted earnings per common share was $0.48, compared to $0.23 for the same period last year. Adjusted diluted earnings per common share was $0.53, compared to $0.54 for the third quarter a year ago.
North America Sales Growth
North America comparable sales were up 3% compared with the third quarter of 2022. This growth was driven by a 6% increase in comparable sales at Domestic Company-owned restaurants and a 2% increase in comparable sales at North America franchised restaurants. However, International comparable sales were down less than 1% from a year ago.
Unit Openings and Sales
The company reported 45 net unit openings in the third quarter, primarily driven by International growth. Global system-wide restaurant sales were $1.23 billion, a 5% increase from the prior year third quarter.
CEO's Commentary
Rob Lynch, Papa Johns president and CEO, commented on the results,
Strong execution by our teams and franchisees led to solid system-wide restaurant sales growth, transaction-led North America comp growth and improving North America restaurant-level margin in the third quarter. Our ability to grow transactions in an ongoing challenging environment, while maintaining average ticket, confirms the strong consumer demand for our product offerings."
Future Outlook
Despite the strong sales growth in North America, the company's adjusted operating income was just in line with the third quarter last year due to the dilutive impact of recently acquired restaurants in the UK. However, the company remains confident in its resilient business model and its ability to build sustainable long-term value for all stakeholders.
Explore the complete 8-K earnings release (here) from Papa John's International Inc for further details.
This article first appeared on GuruFocus.
