Papa John's reports better-than-expected first-quarter earnings, stock jumps
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Papa John’s (PZZA) posted better-than-expected earnings during the first quarter and reaffirmed its 2019 guidance.
Shares jumped 4% in after-hours trade Tuesday.
The pizza chain reported adjusted earnings of 31 cents per share, exceeding analysts’ estimates for 24 cents per share.
Revenue was stronger than estimates at $398.41 million. Analysts polled by Bloomberg were expecting revenue to total $384.60 million during the quarter.
Same-store sales, a key industry metric, fell by 6.9% in North America, which was narrower than the 7.3% loss anticipated by Wall Street.
“The first quarter was a time of promise for Papa John’s. We made further progress in transforming the culture, thinking and momentum within the company,” CEO Steve Ritchie said in a statement. “We have significantly strengthened and refreshed the company’s leadership, adding talented members to the senior management team and highly-qualified directors to the board this year.”
Papa John’s report comes on the heels of news that founder John Schnatter may be looking to sell his 31% stake in the company. According to an SEC filing, Schnatter has seeked the help of financial advisors to explore selling his stake. Schnatter’s 31% stake makes him the largest shareholder.
The pizza giant has had a tumultuous year and a half. The drama surrounding Schnatter finally came to an end in early March when he reached a settlement with Papa John’s to step down from the board and drop the lawsuits he had filed against the company. In March, activist hedge fund Starboard invested $200 million, and its CEO Jeff Smith became chairman of Papa John’s. Since last month, Schnatter has had no formal role at the company he founded. Famed basketball star Shaquille O’Neal was appointed to the board at the end of March.
On the earnings conference call Tuesday evening, management said that while consumer sentiment remains a headwind in the second quarter, they have been seeing improvements from last July. Moreover, when asked about Shaquille O’Neal’s appointment to the board, management said that he has had a positive impact on the board and brand as a whole so far.
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Heidi Chung is a reporter at Yahoo Finance. Follow her on Twitter: @heidi_chung.
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