Papa John’s Earnings Smash Expectations

Papa John’s (NASDAQ:PZZA) first-quarter earnings topped expectations as the pizza chain held on to the momentum it saw during the coronavirus pandemic, even as the country re-opens for business.

Pizza was a tried-and-true bet for many consumers who were seeking familiar and convenient foods for delivery in the early days of the health crisis. But thanks in part to menu innovations like Epic Stuffed Crust pizza, the company’s sales are still growing. Papa John’s also been working to improve its operations and has hired more than 30,000 workers over the last year.

For the quarter ended March 28, net income rose to $33.9 million, or 82 cents per share, from $8.4 million, or 15 cents per share, a year earlier.

Excluding items, Papa John’s earned 90 cents per share, far exceeding earnings of 56 cents per share expected by analysts.

Revenue rose nearly 25% to $511.7 million from $409.9 million a year earlier, outpacing estimates of $471 million.

In North America, same-store sales rose 26.2%, beating the gain of 14.6% estimated by analysts. Its international business was also strong, with same-store sales rising 23.2% in the quarter, above the 17.4% increase projected.

CEO Rob Lynch said the sustained strength in its business is thanks to a strategy put in place in 2019 to focus on innovation, development, improving operations and building an inclusive company culture.

“We’ve accelerated those strategies throughout the pandemic,” Lynch told reporters.
“Q1 has been the culmination of all of those things, amplified by the launch of Epic Stuffed Crust. It has been a huge success for our system, bringing in a whole new wave of customers, exceeding our expectations and increasing our ticket average, because it’s a premium pizza.”

PZZA shares galloped $5.61, or 6%, to $99.61.