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Papa John's (PZZA) Q4 Earnings & Revenues Top Estimates

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Papa John’s International, Inc. PZZA reported robust fourth-quarter fiscal 2021 results, wherein earnings and revenues surpassed the Zacks Consensus Estimate. Both the metrics improved on a year-over-year basis. While the bottom line surpassed the consensus mark for the fourth straight quarter, the top line beat the same for the seventh consecutive quarter.

Earnings & Revenue Discussion

During the fiscal fourth quarter, the company reported adjusted earnings of 75 cents per share, which surpassed the Zacks Consensus Estimate of 72 cents by 4.2%. The bottom line soared 88% from 40 cents in the prior-year quarter.

Quarterly revenues of $528.9 million beat the consensus mark of $527 million by 0.5%. The top line increased 12.6% on a year-over-year basis. The upside can be attributed to strong North America and International restaurants' comparable sales, which benefited from customer retention, menu innovation and improvement strategies. The company witnessed a rise in company-owned restaurant revenues, franchise royalties and commissary sales. International revenues benefited from higher franchise royalties and unit growth.

Global Restaurant Sales & Comps

In the fiscal fourth quarter, total comparable sales rose 8.6% year over year compared with growth of 15.6% reported in the prior-year quarter. Domestic company-owned restaurant comps in the quarter under review increased 10.2% year over year compared with a 10.2% rise in the year-ago quarter.

At North America franchised restaurants, comps rose 11.3% year over year compared with a 14.5% rally in the year-ago quarter. Comps at North America restaurants increased 11.1% year over year compared with 13.5% growth in the year-ago quarter. Comps at international restaurants were up 2.4% year over year compared with a 21.4% increase in the prior-year quarter.

During the fiscal fourth quarter, total global system-wide restaurant sales growth came in at 13.1% year over year compared with a 15.4% rise in the prior-year quarter.

Papa John's International, Inc. Price, Consensus and EPS Surprise

Papa John's International, Inc. Price, Consensus and EPS Surprise
Papa John's International, Inc. Price, Consensus and EPS Surprise

Papa John's International, Inc. price-consensus-eps-surprise-chart | Papa John's International, Inc. Quote

Operating Highlights

Adjusted operating income in the fiscal fourth quarter totaled $41.9 million compared with $25.7 million in the year-ago quarter. During the quarter under review, total costs and expenses amounted to $490.7 million, up 9% from the prior-year quarter’s level.

Balance Sheet

As of Dec 26, 2021, cash and cash equivalents totaled $70.6 million compared with $130.2 million as on Dec 27, 2021. At the end of the fiscal fourth quarter, long-term debt (less current portion) totaled $480.7 million compared with $328.3 million at the end of the fourth quarter of fiscal 2021.

Inventories as of Dec 26, 2021, were $35 million compared with $30.3 million on Dec 27, 2020. Free cash flow (for 12 months ended Dec 26, 2021) totaled $109.7 million compared with $137.1 million in the year-ago quarter.

The company’s board of directors paid a dividend of 35 cents per common share in the fourth quarter of fiscal 2021. During the quarter under review, the company repurchased nearly 408,000 shares with an aggregate cost of $51.9 million and an average price of $127.44 per share.

Unit Developments

During the fiscal fourth quarter, Papa John’s opened 16 net new restaurants in North America. In the international markets, the company opened 65 net new restaurants. As of Dec 26, the company had a global restaurant count of 5,650, with operations in 50 countries and territories worldwide.

Papa John’s has a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Key picks

Some better-ranked stocks in the Zacks Retail-Wholesale sector include Genesco Inc. GCO, Arcos Dorados Holdings Inc. ARCO and Tapestry, Inc. TPR.

Genesco sports a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 2,739.6%, on average. Shares of the company have increased 44.1% in the past year.

The Zacks Consensus Estimate for Genesco’s 2022 sales and EPS suggests growth of 35.3% and 673.7%, respectively, from the year-ago period’s levels.

Arcos Dorados carries a Zacks Rank #2 (Buy). ARCO has a long-term earnings growth of 24.7%. Shares of the company have increased 48.1% in the past year.

The Zacks Consensus Estimate for Arcos Dorados’ 2022 sales and EPS suggests growth of 33.2% and 118.1%, respectively, from the year-ago period’s levels.

Tapestry carries a Zacks Rank #2. The company has a trailing four-quarter earnings surprise of 28.2%, on average. Shares of the company have declined 5.9% in the past year.

The Zacks Consensus Estimate for Tapestry’s 2022 sales and EPS suggests growth of 17.6% and 22.9%, respectively, from the year-ago period’s levels.


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Papa John's International, Inc. (PZZA) : Free Stock Analysis Report

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