We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Papa John's (PZZA) Down 4.6% Since Last Earnings Report: Can It Rebound?
Read MoreHide Full Article
A month has gone by since the last earnings report for Papa John's (PZZA - Free Report) . Shares have lost about 4.6% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Papa John's due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Papa John's Q3 Earnings Miss
Papa John’s International, reported mixed third-quarter 2019 results, wherein earnings missed the Zacks Consensus Estimate but revenues surpassed the same. However, the biggest takeaway from the quarter was positive comparable sales growth, which was reported by the company for the first time in two years.
Its adjusted earnings of 21 cents per share lagged the Zacks Consensus Estimate of 23 cents by 8.7%. However, the bottom line increased 10.5% from the year-ago figure.
Revenues totaled $403.7 million, which outpaced the Zacks Consensus Estimate of $388 million. The top line also increased 5% on a year-over-year basis. This upside can be attributed to positive comparable sales achieved by the company in North America for the first time in two years.
During the third quarter, it opened 15 restaurants in North America and exited 38, with the global restaurant count being 5,343. Additionally, it opened its first restaurant in Portugal. Notably, the company is presently operating in 49 countries and territories worldwide. It re-franchised 21 company-owned restaurants, which include 19 in Georgia, for $5.6 million.
Global Restaurant Sales & Comps
In the third quarter, global restaurant sales moved up 2.3% against the year-ago quarter’s fall of 6.6%. Excluding foreign currency impact, global restaurant sales rose 3.3% versus the year-ago quarter’s decline of 5.9%. Domestic company-owned restaurant comps were up 2.2% in the reported quarter versus a 13.2% decline in the year-ago quarter.
At North America franchised restaurants, comps rose 0.6% against a decline of 8.6% in third-quarter 2018. Also, comps at system-wide North America restaurants moved up 1% against 9.8% decline recorded in the year-ago quarter.
Comps at system-wide international restaurants were up 1.6% against a decline of 3.3% in the prior-year quarter.
Operating Highlights
Total operating income was $4.9 million in the third quarter against operating loss of $14.2 million in the year-ago period. Total costs and expenses amounted to $400.5 million, up 0.3% from third-quarter 2018.
Balance Sheet
As of Sep 29, 2019, cash and cash equivalents totaled $28.4 million compared with $33.3 million on Dec 30, 2018. Long-term debt was $346.1 million at the end of third-quarter 2019 compared with $601.1 million at 2018-end.
Inventories at the end of the reported quarter declined to $25.2 million from $27.2 million on Dec 30, 2018. Free cash flow at the end of third-quarter 2019 summed $15.8 million compared with $74.4 million at 2018-end.
The company paid out cash dividends of $10.5 million in third-quarter 2019 and declared fourth-quarter cash dividend of approximately $10.6 million.
2019 Guidance
Papa John's expects adjusted earnings per share (EPS) within $1-$1.20, indicating a decline from $1.34 in 2018. North America comps are now expected to decline 1.5-3.5% compared with the prior guidance of 1-4% decrease. International comps are anticipated to be flat to up 2% compared with 3% expected earlier. Capital expenditure for 2019 is still expected in the range of $45-$50 million. Additionally, net global unit growth is anticipated in the band of 85-115 units compared with earlier expectation of 100-150 units due to temporary slowdown of openings in Russia and Spain.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
VGM Scores
At this time, Papa John's has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. Notably, Papa John's has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Papa John's (PZZA) Down 4.6% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Papa John's (PZZA - Free Report) . Shares have lost about 4.6% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Papa John's due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Papa John's Q3 Earnings Miss
Papa John’s International, reported mixed third-quarter 2019 results, wherein earnings missed the Zacks Consensus Estimate but revenues surpassed the same. However, the biggest takeaway from the quarter was positive comparable sales growth, which was reported by the company for the first time in two years.
Its adjusted earnings of 21 cents per share lagged the Zacks Consensus Estimate of 23 cents by 8.7%. However, the bottom line increased 10.5% from the year-ago figure.
Revenues totaled $403.7 million, which outpaced the Zacks Consensus Estimate of $388 million. The top line also increased 5% on a year-over-year basis. This upside can be attributed to positive comparable sales achieved by the company in North America for the first time in two years.
During the third quarter, it opened 15 restaurants in North America and exited 38, with the global restaurant count being 5,343. Additionally, it opened its first restaurant in Portugal. Notably, the company is presently operating in 49 countries and territories worldwide. It re-franchised 21 company-owned restaurants, which include 19 in Georgia, for $5.6 million.
Global Restaurant Sales & Comps
In the third quarter, global restaurant sales moved up 2.3% against the year-ago quarter’s fall of 6.6%. Excluding foreign currency impact, global restaurant sales rose 3.3% versus the year-ago quarter’s decline of 5.9%.
Domestic company-owned restaurant comps were up 2.2% in the reported quarter versus a 13.2% decline in the year-ago quarter.
At North America franchised restaurants, comps rose 0.6% against a decline of 8.6% in third-quarter 2018. Also, comps at system-wide North America restaurants moved up 1% against 9.8% decline recorded in the year-ago quarter.
Comps at system-wide international restaurants were up 1.6% against a decline of 3.3% in the prior-year quarter.
Operating Highlights
Total operating income was $4.9 million in the third quarter against operating loss of $14.2 million in the year-ago period. Total costs and expenses amounted to $400.5 million, up 0.3% from third-quarter 2018.
Balance Sheet
As of Sep 29, 2019, cash and cash equivalents totaled $28.4 million compared with $33.3 million on Dec 30, 2018. Long-term debt was $346.1 million at the end of third-quarter 2019 compared with $601.1 million at 2018-end.
Inventories at the end of the reported quarter declined to $25.2 million from $27.2 million on Dec 30, 2018. Free cash flow at the end of third-quarter 2019 summed $15.8 million compared with $74.4 million at 2018-end.
The company paid out cash dividends of $10.5 million in third-quarter 2019 and declared fourth-quarter cash dividend of approximately $10.6 million.
2019 Guidance
Papa John's expects adjusted earnings per share (EPS) within $1-$1.20, indicating a decline from $1.34 in 2018. North America comps are now expected to decline 1.5-3.5% compared with the prior guidance of 1-4% decrease. International comps are anticipated to be flat to up 2% compared with 3% expected earlier. Capital expenditure for 2019 is still expected in the range of $45-$50 million. Additionally, net global unit growth is anticipated in the band of 85-115 units compared with earlier expectation of 100-150 units due to temporary slowdown of openings in Russia and Spain.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
VGM Scores
At this time, Papa John's has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. Notably, Papa John's has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.