Earnings Review and Free Research Report: Papa John's Revenue and EPS Grew on a Y-o-Y Basis; Announced $500 Million Share Repurchase Program
Research Desk Line-up: Aramark Post Earnings Coverage
LONDON, UK / ACCESSWIRE / August 18, 2017 /Pro-Trader Daily has just published a free post-earnings coverage on Papa John's International, Inc. (NASDAQ: PZZA), which can be viewed by registering at http://protraderdaily.com/optin/?symbol=PZZA, following the Company's disclosure of its second quarter fiscal 2017 operating results on August 01, 2017. The pizza chain delivered its 27th consecutive quarter of positive North America comparable sales and its 29th consecutive quarter of positive International comparable sales. Our daily stock reports are accessible for free, and with those to look forward today you also will be signing up for a complimentary member's account at:
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For the quarter ended June 25, 2017, Papa John's consolidated revenues grew 2.8% to $434.78 million compared to revenue of $422.96 million in Q2 2016, primarily due to increased North America commissary sales due to higher volumes and higher commodity costs. The Company's revenue numbers fell short of analysts' estimates of $456.6 million. In the reported quarter, Papa John's system-wide comparable sales grew 1.4% for North America and 3.9% for international segment.
During Q2 2017, Papa John's consolidated operating income grew 1.0% to $37.22 million compared to $36.83 million for Q2 2016. The Company's operating income as a percentage of consolidated revenues decreased 0.1% to 8.6% for the reported quarter. During Q2 2017 North America commissary and other margins as a percentage of related revenues decreased 0.7% due primarily to start-up costs related to the Company's new domestic commissary in Georgia.
Papa John's International margin, as a percentage of international revenues, decreased 2.0% primarily due to lower operating margins at its United Kingdom commissary from higher commodity costs.
For Q2 2017, Papa John's net income totaled $23.54 million up 4.4% compared to net income of $22.54 million in Q2 2016. The Company's diluted earnings per share increased 6.6% to $0.65 for the reported quarter compared to $0.61 per diluted share for the prior year's same quarter. Diluted earnings per share were favorably impacted by approximately $0.01 for the reported quarter, due to the adoption of the new guidance for accounting for share-based compensation. Excluding the impact of this adoption, diluted earnings per share would have increased 4.9% for Q2 2017. Papa John's earnings topped Wall Street's expectations of $0.62 per share.
Global Restaurant Unit Data
At June 25, 2017, there were 5,088 Papa John's restaurants operating in all 50 states and in 44 international countries and territories. The Company has added 153 net worldwide units over the trailing four quarters. Papa John's development pipeline as of June 25, 2017, included approximately 1,100 restaurants (200 units in North America and 900 units internationally), the majority of which are scheduled to open over the next six years.
Share Repurchase Activity and Increased Authorization
During Q2 2017, Papa John's repurchased 262,000 shares for a total price of $20.89 million. In the six months period ended June 25, 2017, the Company bought back 421,000 shares for an amount of $33.97 million. Approximately 36.6 million actual shares of the Company's common stock were outstanding as of June 25, 2017.
In the earnings release, Papa John's Board of Directors authorized a $500 million increase in the Company's share repurchase authorization, which previously had $90.2 million authorization remaining. The Company expects to repurchase the full amount of the increased authorization within approximately 12-18 months of the date of this announcement, and plans to enter into new debt facilities to finance the increased capital return program.
Papa John's paid a cash dividend of approximately $7.3 million, or $0.20 per common share, during Q2 2017. Subsequent to the second quarter, on July 27, 2017, the Company's Board of Directors approved a 12.5% increase in the Company's dividend rate per common share from $0.80 on an annual basis to $0.90 on an annual basis, and declared a third quarter dividend of $0.225 per common share. The dividend will be paid on August 18, 2017.
For FY17, Papa John's updated its net global new unit growth forecast in the range of 3.0% to 4.0% from its previous guidance of 4.0% to 5.0%. The Company reduced the net unit outlook to reflect the closure of India market; 33 stores were closed as of the end of Q2 2017 and the remaining 33 stores will be closed in Q3 2017.
On Thursday, August 17, 2017, the stock closed the trading session at $78.95, slightly climbing 0.87% from its previous closing price of $78.27. A total volume of 510.17 thousand shares have exchanged hands. Papa John's' stock price advanced 3.94% in the last one month, 0.83% in the past three months and 6.46% in the previous twelve months. The stock is trading at a PE ratio of 27.54 and has a dividend yield of 1.14%. The stock currently has a market cap of $2.85 billion.
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