In This Article:
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Global System-Wide Restaurant Sales: $1.23 billion, down approximately 8% in constant currency.
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North America Comparable Sales: Down 4% in the fourth quarter.
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International Comparable Sales: Up 2% year-over-year in the fourth quarter.
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Total Revenues: $531 million, down 7% from last year.
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Adjusted Operating Income: $37 million, down $10 million from a year ago.
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Adjusted Operating Income Margin: 7%, down from 8.3% in 2023.
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Free Cash Flow: $34 million for the full year 2024.
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Net Cash Provided by Operating Activities: $107 million for the full year 2024.
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Number of Restaurants Opened in 2024: More than 300 globally, including 112 in North America and 198 internationally.
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Number of Restaurants Closed in 2024: 31 in North America and 155 internationally.
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Gross Leverage Ratio: 3.2 times.
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Cash and Borrowings Available: Approximately $291 million.
Release Date: February 27, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Papa John's International Inc (NASDAQ:PZZA) reported sequential improvement in sales comps from the third to the fourth quarter of 2024.
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The company launched successful marketing campaigns, such as the 'Meet the Makers' campaign, which highlighted the craftsmanship behind their pizzas.
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Papa John's International Inc (NASDAQ:PZZA) revamped its loyalty rewards program, resulting in increased engagement and faster activation of members.
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The company opened more than 300 new restaurants globally in 2024, marking significant growth, including reaching the milestone of 6,000 restaurants.
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Papa John's International Inc (NASDAQ:PZZA) is investing in its tech stack to enhance the digital customer experience and CRM capabilities, aiming to drive operational efficiency.
Negative Points
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Global system-wide restaurant sales were down approximately 8% in constant currency for the fourth quarter, primarily due to the additional week of operations in the prior year.
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North America comparable sales were down 4% in the fourth quarter, indicating challenges in the domestic market.
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Adjusted operating income for the fourth quarter of 2024 was down $10 million from the previous year, reflecting lower operating margins.
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The company is facing pressure from higher food basket costs, particularly proteins and cheese, impacting margins.
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Papa John's International Inc (NASDAQ:PZZA) anticipates some pressure to remain in the first quarter of 2025 due to loyalty program enhancements and a value-focused consumer environment.
Q & A Highlights
Q: How does Papa John's plan to perform relative to the industry in 2025, especially in the back half of the year? A: Todd Penegor, CEO, explained that while the pizza category is expected to be flat to slightly down, Papa John's initiatives such as enhancing the loyalty program, leveraging CRM data, and optimizing marketing spend will help build momentum and potentially gain market share, particularly in transactions. Ravi Thanawala, CFO, added that transaction trends have shown improvement, and efforts are focused on shortening the time between customer transactions and enhancing carryout and aggregator channels.