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Papa John's (PZZA) Q3 Earnings Beat Estimates, Increase Y/Y

Papa John's (PZZA) third-quarter fiscal 2021 top line reflects higher comparable sales from the North America restaurants. The upside is backed by solid customer retention and innovation strategies.

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This story originally appeared on Zacks

Papa John’s International, Inc. PZZA reported robust third-quarter fiscal 2021 results, with earnings and revenues surpassing the Zacks Consensus Estimate. The metrics increased on a year-over-year basis. Following the results, shares of the company moved up 13.6% during the trading hours on Nov 4.

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Earnings & Revenue Discussion

During the fiscal third quarter, the company reported adjusted earnings of 83 cents per share that surpassed the Zacks Consensus Estimate of 69 cents by 20.3%. The bottom line surged 137.1% from 35 cents reported in the prior-year quarter.

Quarterly revenues of $512.8 million beat the consensus mark of $501 million by 2.3%. The top line increased 8.4% on a year-over-year basis. The upside can be attributed to strong comparable sales in North America on account of strong customer retention and innovation strategies. The company witnessed a rise in company-owned restaurant revenues, franchise royalties and commissary sales. International revenues benefited from higher franchise royalties and unit growth.

Papa John's International, Inc. Price, Consensus and EPS Surprise

 

Papa John's International, Inc. Price, Consensus and EPS Surprise

Papa John's International, Inc. price-consensus-eps-surprise-chart | Papa John's International, Inc. Quote

 

Global Restaurant Sales & Comps

In the fiscal third quarter, total comparable sales rose 7.3% year over year compared with 23% growth reported in the prior-year quarter. Domestic company-owned restaurant comps in the reported quarter increased 7.4% year over year compared with a 18.2% rise in the year-ago quarter.

At North America franchised restaurants, comps rose 6.8% year over year compared with a 25.6% rally in the year-ago quarter. Comps at North America restaurants increased 6.9% year over year compared with 23.8% growth in the year-ago quarter. Comps at international restaurants were up 8.3% year over year compared with a 20.7% increase in the prior-year quarter.

During the quarter, total global system-wide restaurant sales growth came in at 11.2% year over year compared with a 22.1% rise in the prior-year quarter.

Operating Highlights

Adjusted operating income in the fiscal third quarter came in at $40.7 million compared with $24.5 million in the year-ago quarter. During the quarter, total costs and expenses amounted to $474.2 million, up 5.8% from the prior-year quarter’s level.

Balance Sheet

As of Sep 26, 2021, cash and cash equivalents totaled $105.8 million compared with $96.2 million as on Jun 27, 2021. At the end of the fiscal third quarter, long-term debt (less current portion) totaled $414.9 million compared with $403.8 million at the end of second-quarter fiscal 2021.

Inventories as of Sep 26, 2021, came in at $33.5 million compared with $29.8 million on Jun 27, 2021. Free cash flow (for the nine months ended Sep 26, 2021) totaled $145.9 million compared with $134 million in the year-ago quarter.

During the fiscal third quarter, the company approved a new share repurchase program worth $425 million to boost stockholders’ value. The company stated that the new program will have an indefinite duration and will operate alongside the company’s existing share repurchase authorization of $75 million (expiring on Dec 26, 2021).

The company’s board of directors announced a dividend of 35 cents per common share. The dividend will be payable on Nov 19, 2021, to shareholders of record as of Nov 9, 2021. During third-quarter fiscal 2021, the company paid out common stock dividends worth $12.8 million.

Unit Developments

During the fiscal third quarter, Papa John’s opened 23 new restaurants in North America and exited nine. In the international markets, the company opened 71 new restaurants and exited 39. As of Sep 26, the company had a global restaurant count of 5,569, thereby operating in 50 countries and territories worldwide.

Zacks Rank & Peer Releases

Papa John’s currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

YUM! Brands, Inc. YUM reported strong third-quarter 2021 results, with earnings and revenues surpassing the Zacks Consensus Estimate. Both the metrics increased year over year. The company’s adjusted earnings per share (EPS) of $1.22 beat the Zacks Consensus Estimate of $1.06. In the prior-year quarter, the company had reported adjusted earnings of $1.01. Quarterly revenues of $1,606 million surpassed the consensus estimate of $1,584 million. The top line increased 11% year over year. The company’s results in the quarter benefited from strong digital sales, robust unit development and a diversified global business model.

McDonald’s Corporation MCD reported third-quarter 2021 results, with earnings and revenues surpassing the Zacks Consensus Estimate. Both the metrics increased year over year. The company reported adjusted EPS of $2.76, which surpassed the Zacks Consensus Estimate of $2.46. The bottom line rose 24% year over year. Quarterly revenues of $6,201.3 million beat the Zacks Consensus Estimate of $6,024 million. The figure rose 14% year over year. The top line benefited from an increase in global comparable sales.

Starbucks Corporation SBUX reported mixed fourth-quarter fiscal 2021 results, with earnings meeting the Zacks Consensus Estimate and revenues missing the same. The top and the bottom line improved on a year-over-year basis. The company reported adjusted EPS of $1, in line with the Zacks Consensus Estimate. In the prior-year quarter, the company had reported adjusted EPS of 51 cents. Quarterly revenues of $8,146.7 million missed the Zacks Consensus Estimate of $8,263 million by 1.4%. The top line increased 31.3% from the year-ago quarter’s levels. The uptick was driven by growth in comparable store sales.



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