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Category: Stock Market and Papa John's (PZZA)
Date: 12 August 2020 Stock Price of Papa John's: $93.65 We take a look at the 2nd quarter earnings report of their 2020 fiscal year of Papa John's, a pizza franchise group with over 5000 locations in over 45 countries. Revenues for the 2nd quarter 2020 topped $460 million, up almost 16% on the previous year. The group recorded a profit of $20.6 million for the quarter.
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Faced with an unprecedented global challenge but guided by our values and purpose, Papa John’s achieved record sales in the second quarter - Rob Lynch, President & CEO."
About Papa John's
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.
Overview of Papa John's 2nd quarter 2020 earnings report
- Total Revenues: $460.623 million (up from $399.623 million for the same quarter of the previous year)
- Total Revenues increased by 15.3% over the last 12 months
- Total costs and expenses: $430.089 million (up from $385.555 million for the same quarter of the previous year)
- Total costs and expenses increased by 11.6% over the last 12 months
- Some margin gain for Papa Johns as revenues increased at a faster rate than their expenses
- Net income: $20.614 million (up from $8.354 million for the same quarter of the previous year)
- Diluted earnings per share: $0.48 (down from $0.15 for the same quarter of the previous year)
- PE ratio: 48.3
- Dividend declared: $0.225
- Dividend yield: 0.9%
- Diluted weighted-average shares outstanding: 32.6 million (up from 31.7 million for the same quarter of the previous year)
- Cash and cash equivalents: $75.699 million
- Cash and cash equivalents per share: $2.32
- Cash and cash equivalents makes up 2.48% of Papa John's market capital
- Cash and cash equivalents makes up 5.1% of Papa John's total assets
- Accounts receivable: $77.607 million
- Accounts receivable makes up 10.8% of Papa John's s total assets
- Cash generated from operations for the first 1st quarter of 2020: $33.734 million
- Cash generated from operations per share for first 1 quarter of 2020: $1.04
Papa John's management commentary on their 2nd quarter 2020 earnings
Louisville, Kentucky (August 6, 2020) – Papa John’s International, Inc. (NASDAQ: PZZA) today announced financial results for the three and six months ended June 28, 2020. The company also provided an update on the business impact of the global coronavirus (COVID-19) pandemic.
“Faced with an unprecedented global challenge but guided by our values and purpose, Papa John’s achieved record sales in the second quarter,” said Rob Lynch, President & CEO. “Across the U.S. and those international markets where delivery-based businesses have remained open, we have safely and successfully met the needs of millions of new and returning customers who have relied on us for high-quality, delicious pizza, Papadias, and other food during the pandemic. This was possible because of the dedication and hard work of our team members and local franchisees, as well as our work to create a more diverse, inclusive and innovative culture.”
Mr. Lynch continued, “Helping drive growth, our innovation pipeline continues firing on all cylinders with the launch of our hugely popular new Shaq-a-Roni pizza, which has generated over $2 million in charitable contributions that will go toward building the communities we serve. Our strong momentum has also enabled us to hire over 20,000 new restaurant team members during the second quarter and target hiring another 10,000 positions in the third, helping support those impacted by unprecedented levels of unemployment. These efforts position Papa John’s solidly to continue meeting the needs of our customers who face continued challenges from COVID-19, and to drive long-term sustainable loyalty to our brand long after the current pandemic.”
“Faced with an unprecedented global challenge but guided by our values and purpose, Papa John’s achieved record sales in the second quarter,” said Rob Lynch, President & CEO. “Across the U.S. and those international markets where delivery-based businesses have remained open, we have safely and successfully met the needs of millions of new and returning customers who have relied on us for high-quality, delicious pizza, Papadias, and other food during the pandemic. This was possible because of the dedication and hard work of our team members and local franchisees, as well as our work to create a more diverse, inclusive and innovative culture.”
Mr. Lynch continued, “Helping drive growth, our innovation pipeline continues firing on all cylinders with the launch of our hugely popular new Shaq-a-Roni pizza, which has generated over $2 million in charitable contributions that will go toward building the communities we serve. Our strong momentum has also enabled us to hire over 20,000 new restaurant team members during the second quarter and target hiring another 10,000 positions in the third, helping support those impacted by unprecedented levels of unemployment. These efforts position Papa John’s solidly to continue meeting the needs of our customers who face continued challenges from COVID-19, and to drive long-term sustainable loyalty to our brand long after the current pandemic.”
Global Restaurant Unit Data
At June 28, 2020, there were 5,347 Papa John’s restaurants operating in 48 countries and territories,
Our development pipeline as of June 28, 2020 included approximately 1,100 restaurants (100 units in North America and 1,000 units internationally), the majority of which are scheduled to open over the next six years.
Cash Dividend
The company paid common and preferred stock dividends of $10.7 million in the second quarter of 2020. The company declared third quarter 2020 cash dividends of approximately $10.8 million on July 31, 2020, which will be paid to common shareholders on August 21, 2020. The third quarter preferred dividend will be paid on October 1, 2020.
At June 28, 2020, there were 5,347 Papa John’s restaurants operating in 48 countries and territories,
Our development pipeline as of June 28, 2020 included approximately 1,100 restaurants (100 units in North America and 1,000 units internationally), the majority of which are scheduled to open over the next six years.
Cash Dividend
The company paid common and preferred stock dividends of $10.7 million in the second quarter of 2020. The company declared third quarter 2020 cash dividends of approximately $10.8 million on July 31, 2020, which will be paid to common shareholders on August 21, 2020. The third quarter preferred dividend will be paid on October 1, 2020.
Papa John's (NASDAQ: PZZA) stock price history
The image below, obtained from Google, shows the stock price history of Papa Johns over the last 5 years. And it's been a ok time for Papa Johns stockholders. 5 years ago the stock was trading at around $78 a stock and its currently trading at $93.65 a stock. That's average return of 30% provided to Domino's stockholders over the last 5 years.
The stock of Papa Johns is however trading at a lot closer to its 52 week high of $100.69 than it is to its 52 week low of $28.55 which to us is a clear indication that the short term sentiment and momentum of Papa Johns stock is very positive at this point in time.
The stock of Papa Johns is however trading at a lot closer to its 52 week high of $100.69 than it is to its 52 week low of $28.55 which to us is a clear indication that the short term sentiment and momentum of Papa Johns stock is very positive at this point in time.
Papa John's (PZZA) stock vs Domino's (DPZ) stock over the last 5 years
The image below shows the stock price performance of Papa John's (PZZA) and Domino's Pizza over the last 5 years. While both these companies are active in the pizza franchise restaurants business their stock price performance over the 5 year period is vastly different. The summary below shows the stock price returns of PZZA and DPZ over the last 5 years
- Papa John's (PZZA) 30%
- Domino's Pizza: 256.60%
Recent coverage of Papa John's
The extract below discusses the latest regarding Papa Johns
Shares of Papa John's International Inc. PZZA, -0.58% fell 2.2% in Thursday premarket trading after the pizza delivery chain reported second-quarter revenue that was below expectations. Net income totaled $15.7 million, or 48 cent per share, up from $4.9 million, or 15 cents per share, last year. Revenue totaled $460.6 million, up from $399.6 million last year. Sales for the quarter reached a record, according to a statement from Chief Executive Rob Lynch. The FactSet consensus was for EPS of 47 cents and revenue of $467.0 million. North American comparable sales rose 28% while international comparable sales were up 5.3%. The FactSet consensus was for domestic growth of 11.1% and international growth of 3%. Papa John's hired 20,000 workers during the quarter and will add another 10,000. Papa John's stock has rallied 57% for the year to date while the S&P 500 index [s:s px] is up 3% for the period.
Read the full article here
Shares of Papa John's International Inc. PZZA, -0.58% fell 2.2% in Thursday premarket trading after the pizza delivery chain reported second-quarter revenue that was below expectations. Net income totaled $15.7 million, or 48 cent per share, up from $4.9 million, or 15 cents per share, last year. Revenue totaled $460.6 million, up from $399.6 million last year. Sales for the quarter reached a record, according to a statement from Chief Executive Rob Lynch. The FactSet consensus was for EPS of 47 cents and revenue of $467.0 million. North American comparable sales rose 28% while international comparable sales were up 5.3%. The FactSet consensus was for domestic growth of 11.1% and international growth of 3%. Papa John's hired 20,000 workers during the quarter and will add another 10,000. Papa John's stock has rallied 57% for the year to date while the S&P 500 index [s:s px] is up 3% for the period.
Read the full article here
Papa John's (PZZA) latest stock valuation
So what is Papa John's stock worth based on the release of their 2nd quarter 2020 earnings report? Based on Papa John's 2nd quarter 2020 earnings report our valuation model provides a target price (full value price) at $67.10 a stock (up slightly from our 1st quarter 2020 earnings valuation of Papa Johns). We therefore believe that the stock is overvalued.
We usually suggest long term fundamental or value investors look to enter into a stock at least 10% below our target price (full value price) which in this case is $67.10 Thus we see a good entry point into Papa John's stock at $60.40 or below. We believe that Papa John's stock will pull back strongly in coming weeks and months to levels closer to our target price (full value price).
We therefore rate the stock of Papa John's (PZZA) as a SELL
We usually suggest long term fundamental or value investors look to enter into a stock at least 10% below our target price (full value price) which in this case is $67.10 Thus we see a good entry point into Papa John's stock at $60.40 or below. We believe that Papa John's stock will pull back strongly in coming weeks and months to levels closer to our target price (full value price).
We therefore rate the stock of Papa John's (PZZA) as a SELL
Next earnings release of Papa John's
It is expected that Papa John's will release their 3rd quarter 2020 earnings report in early November 2020