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Category: Papa John's (PZZA) and Stock Market
Date: 18 July 2020 Stock price of Papa John's: $91.73 We take a look at the latest business update released by Papa Johns in which they release more details regarding the impact of Covid-19 on their business. June 2020 reflected the third month in a row that the grow recorded double digit sales growth in the US.
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Rob Lynch, President & CEO -In June Papa John’s delivered a third consecutive month of double-digit sales growth in North America and strong growth internationally. Continued strong results reflect both the hard work of our team members and local franchisees, as well as the trust that we have earned from millions of customers who have relied on us to deliver high-quality pizza and other food throughout the pandemic."
About Papa Johns (PZZA)
The secret to success is much like the secret to making a better pizza - the more you put into it, the more you get out of it. Our pizza family is as hungry for perfection today as we were when we first opened our doors more than 30 years ago. And we're driven to be the best at making innovative new products and recipes.
Quality is at our core. It’s the foundation we started with, from the first Papa John's pizza that was made in a broom closet in Jeffersonville, IN, to now more than 5,000 locations in 45 countries and territories around the world.
We don’t use cheap and more processed ingredients. Whether it's our signature sauce, toppings, our original fresh dough, or even the box itself, we invest in our ingredients to ensure that we always give you the finest quality pizza.
For you, it’s not just a better pizza. It’s a family gathering, memorable birthday, work celebration or simply a great meal. It’s our goal to make sure you always have the best ingredients for every occasion.
Quality is at our core. It’s the foundation we started with, from the first Papa John's pizza that was made in a broom closet in Jeffersonville, IN, to now more than 5,000 locations in 45 countries and territories around the world.
We don’t use cheap and more processed ingredients. Whether it's our signature sauce, toppings, our original fresh dough, or even the box itself, we invest in our ingredients to ensure that we always give you the finest quality pizza.
For you, it’s not just a better pizza. It’s a family gathering, memorable birthday, work celebration or simply a great meal. It’s our goal to make sure you always have the best ingredients for every occasion.
Business Update from Papa Johns
LOUISVILLE, Ky.--(BUSINESS WIRE)--Jun. 30, 2020-- Papa John’s International, Inc. (NASDAQ: PZZA) today provided an additional update on the ongoing business impact of the global coronavirus (COVID-19) pandemic, including preliminary estimated comparable sales information for the June month and second quarter fiscal periods. In light of the uncertainty and volatility related to the pandemic, the company has continued to provide this information on a monthly basis.
Rob Lynch, President & CEO said, “In June Papa John’s delivered a third consecutive month of double-digit sales growth in North America and strong growth internationally. Continued strong results reflect both the hard work of our team members and local franchisees, as well as the trust that we have earned from millions of customers who have relied on us to deliver high-quality pizza and other food throughout the pandemic.
“The events of the past few months have accelerated Papa John’s transformation into an innovation-driven organization, contributing to our strong business momentum today. This focus on innovation has enabled initiatives like ‘No Contact Delivery’ and Papadias, as well as an exciting pipeline of upcoming products. In addition, our work to create a more diverse and inclusive culture has helped us to become an employer of choice for over 20,000 new team members during the pandemic. Lastly, Papa John’s outperformance has allowed us to increase our investments through the Papa John’s Foundation into great non-profit organizations that serve our communities. While we still have much work to do, we are building the kind of company that is positioned for outstanding performance in the future.”
Preliminary Estimated Comparable Sales for June 2020 Fiscal Period and Second Quarter
Preliminary estimated comparable sales information for the five weeks ended June 28, 2020 (Period 6 of the fiscal year), and for the fiscal quarter ended June 28, 2020, relative to the same periods in the prior year are as follows:
Period 6 Second Quarter
Five weeks ended June 28, 2020 Three months ended June 28, 2020
Comparable sales growth
Domestic company-owned restaurants : 18.5% 22.6%
North America franchised restaurants: 26.3% 29.6%
System-wide North America restaurants: 24.4% 28.0%
System-wide international restaurants 6.0% 5.3%
Update on Temporary Restaurant Closures as a Result of COVID-19
Of the company’s approximately 2,100 international franchised stores, the number temporarily closed has declined to approximately 225, principally in Europe and Latin America, in accordance with government policies. Some international markets are open predominantly for delivery only, such as in the United Kingdom. In North America, almost all traditional restaurants remain open and fully operational. A number of non-traditional restaurants located in universities and stadiums are temporarily closed; these non-traditional locations are not material to the company’s revenues and operating results.
About Comparable Sales
The Company believes North America and international comparable sales growth information, as defined in the table above, is useful in analyzing its results since franchisees pay royalties and marketing fund contributions that are based on a percentage of franchise sales. Franchise sales also generate commissary revenue in the United States and in certain international markets. Franchise restaurant and comparable sales growth information is also useful for comparison to industry trends and evaluating the strength of our brand. Management believes the presentation of franchise restaurant sales growth, excluding the impact of foreign currency, provides investors with useful information regarding underlying sales trends and the impact of new unit growth without being impacted by swings in the external factor of foreign currency. Franchise restaurant sales are not included in the company’s revenues.
Rob Lynch, President & CEO said, “In June Papa John’s delivered a third consecutive month of double-digit sales growth in North America and strong growth internationally. Continued strong results reflect both the hard work of our team members and local franchisees, as well as the trust that we have earned from millions of customers who have relied on us to deliver high-quality pizza and other food throughout the pandemic.
“The events of the past few months have accelerated Papa John’s transformation into an innovation-driven organization, contributing to our strong business momentum today. This focus on innovation has enabled initiatives like ‘No Contact Delivery’ and Papadias, as well as an exciting pipeline of upcoming products. In addition, our work to create a more diverse and inclusive culture has helped us to become an employer of choice for over 20,000 new team members during the pandemic. Lastly, Papa John’s outperformance has allowed us to increase our investments through the Papa John’s Foundation into great non-profit organizations that serve our communities. While we still have much work to do, we are building the kind of company that is positioned for outstanding performance in the future.”
Preliminary Estimated Comparable Sales for June 2020 Fiscal Period and Second Quarter
Preliminary estimated comparable sales information for the five weeks ended June 28, 2020 (Period 6 of the fiscal year), and for the fiscal quarter ended June 28, 2020, relative to the same periods in the prior year are as follows:
Period 6 Second Quarter
Five weeks ended June 28, 2020 Three months ended June 28, 2020
Comparable sales growth
Domestic company-owned restaurants : 18.5% 22.6%
North America franchised restaurants: 26.3% 29.6%
System-wide North America restaurants: 24.4% 28.0%
System-wide international restaurants 6.0% 5.3%
Update on Temporary Restaurant Closures as a Result of COVID-19
Of the company’s approximately 2,100 international franchised stores, the number temporarily closed has declined to approximately 225, principally in Europe and Latin America, in accordance with government policies. Some international markets are open predominantly for delivery only, such as in the United Kingdom. In North America, almost all traditional restaurants remain open and fully operational. A number of non-traditional restaurants located in universities and stadiums are temporarily closed; these non-traditional locations are not material to the company’s revenues and operating results.
About Comparable Sales
The Company believes North America and international comparable sales growth information, as defined in the table above, is useful in analyzing its results since franchisees pay royalties and marketing fund contributions that are based on a percentage of franchise sales. Franchise sales also generate commissary revenue in the United States and in certain international markets. Franchise restaurant and comparable sales growth information is also useful for comparison to industry trends and evaluating the strength of our brand. Management believes the presentation of franchise restaurant sales growth, excluding the impact of foreign currency, provides investors with useful information regarding underlying sales trends and the impact of new unit growth without being impacted by swings in the external factor of foreign currency. Franchise restaurant sales are not included in the company’s revenues.
Stock price history of Papa Johns (PZZA)
The image below shows the stock price history of Papa Johns over the last 3 years. Over the three year period the stock of PZZA increased by 17.62%.
While the returns are not stellar it is at least positive, which is more than what a lot of listed restaurant can say at this point
Next earnings release of Papa Johns (PZZA)
It is expected that Papa Johns will release their 2nd quarter 2020 earnings report in early August 2020