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Papa John's (PZZA) Q2 Earnings Beat Estimates, Stock Up

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Papa John’s International, Inc. PZZA reported robust second-quarter 2021 results, with earnings and revenues surpassing the Zacks Consensus Estimate. Moreover, the metrics improved on a year-over-year basis. Following the results, shares of the company moved up 4% during trading hours on Aug 5.

Earnings & Revenues Discussion

During fiscal second quarter, the company reported adjusted earnings of 93 cents per share that surpassed the Zacks Consensus Estimate of 69 cents by 34.8%. The bottom line surged 93.8% from 48 cents reported in the prior-year quarter.

Quarterly revenues of $515 million beat the consensus mark of $491 million by 4.9%. The top line increased 11.8% on a year-over-year basis. The upside can be attributed to strong comparable sales in North America owing to initiatives such as menu, delivery and digital innovation. Meanwhile, international revenues benefitted from higher franchise royalties and unit growth.

Papa Johns International, Inc. Price, Consensus and EPS Surprise

Papa Johns International, Inc. Price, Consensus and EPS Surprise
Papa Johns International, Inc. Price, Consensus and EPS Surprise

Papa Johns International, Inc. price-consensus-eps-surprise-chart | Papa Johns International, Inc. Quote

Global Restaurant Sales & Comps

In fiscal second quarter, total comparable sales rose 9% year over year compared with 22.2% growth reported in the prior-year quarter. Domestic company-owned restaurant comps in the reported quarter increased 5.6% year over year compared with 22.6% growth in the year-ago quarter.

At North America franchised restaurants, comps rose 5.2% year over year compared with 29.7% growth in the year-ago quarter. Also, comps at North America restaurants increased 5.2% year over year compared with 28% growth in the year-ago quarter. Comps at international restaurants were up 21.2% year over year compared with 5.3% growth in the prior-year quarter.

During the quarter, total global system-wide restaurant sales growth came in at 12.2% year over year compared with 20.8% growth in the prior-year quarter.

Operating Highlights

Adjusted operating income in fiscal second quarter came in at $48 million compared with $30.5 million in the year-ago quarter. During the quarter, total costs and expenses amounted to $470.4 million, up 9.4% from the prior-year quarter’s level.

Balance Sheet

As of Jun 27, 2021, cash and cash equivalents totaled $96.2 million compared with $171.3 million as on Mar 28, 2021. At the end of fiscal second quarter, long-term debt (less current portion) totaled $403.8 million compared with $328.5 million at the end of first-quarter fiscal 2021.

Inventories as of Jun 27, 2021, came in at $29.8 million compared with $30.3 million on Dec 27, 2020. Free cash flow (for the six months ended Jun 27, 2021) totaled $100.1 million compared with $67 million in the year-ago quarter.

Meanwhile, the company announced a hike in its quarterly dividend payout. The company raised its quarterly dividend by 55.6%, which indicates its intention to utilize free cash for boosting shareholders’ returns. The company raised quarterly dividend to 35 cents per share (or $1.40 annually) from the previous payout of 22.5 cents (or 90 cents annually). The hiked dividend will be paid out on Aug 27, 2021 to shareholders on record as of Aug 16, 2021.

During second-quarter fiscal 2021, the company paid out common and preferred stock dividends worth $10.4 million.

Unit Developments

During fiscal second quarter, Papa John’s opened 24 new restaurants in North America and exited 13. In international markets, the company opened 71 new restaurants and exited 27. As of Jun 27, the company had a global restaurant count of 5,523, thereby operating in 49 countries and territories worldwide.

The company expanded its partnership with Drake Food Service International to open over 220 Papa John’s restaurants by 2025. This includes more than 170 stores across Latin America, Spain and Portugal. Also, Drake Food Service plans to open 50 new restaurants in the U.K. over the next four years. The company already purchased 60 Papa John’s restaurants in London, making it the brand’s largest franchisee in the country. Under the terms of this expanded partnership, Drake Food Service will operate more than 560 Papa John’s restaurants by 2025.

Zacks Rank & Peer Releases

Papa John’s currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

BJ's Restaurants, Inc. BJRI reported second-quarter fiscal 2021 results, with earnings and revenues surpassing the Zacks Consensus Estimate. Both the metrics increased year over year. The company’s adjusted earnings per share (EPS) of 26 cents beat the Zacks Consensus Estimate of 16 cents. In the prior-year quarter, the company had reported adjusted loss of 99 cents per share. Quarterly revenues of $290.3 million surpassed the consensus estimate of $285 million. The top line also rallied 126.7% year over year. The upside can be primarily attributed to the lifting of capacity and social distancing restrictions, thereby resulting in enhanced dining room capacity.

McDonald's Corporation MCD reported second-quarter 2021 results, with earnings and revenues surpassing the Zacks Consensus Estimate. Both the metrics increased year over year. The company reported adjusted EPS of $2.37, which surpassed the Zacks Consensus Estimate of $2.12. Moreover, the bottom line rose 259.1% year over year. Quarterly revenues of $5,887.9 million beat the Zacks Consensus Estimate of $5,629 million. Moreover, the figure rose 56.5% year over year. The top line benefited from increase in global comparable sales.

Starbucks Corporation SBUX reported solid third-quarter fiscal 2021 results, with earnings and revenues surpassing the Zacks Consensus Estimate. Both the metrics increased year over year. The company reported adjusted EPS of $1.01, which beat the Zacks Consensus Estimate of 77 cents. In the prior-year quarter, the company had reported adjusted loss per share of 46 cents. Meanwhile, quarterly revenues of $7,496.5 million missed the Zacks Consensus Estimate of $7,243 million. Moreover, the top line increased 77.6% from the year-ago quarter’s levels. The uptick was driven by growth in comparable store sales.


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