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Papa John's International, Inc. PZZA provided an update on its business for the fourth quarter and financial year 2024. The company stated that the results are preliminary and subject to the completion of normal year-end accounting procedures and adjustments. The company expects to release its fourth-quarter fiscal 2024 results on Feb. 27, 2025.
Preliminary Sales Update
In the fiscal fourth quarter ending Dec. 29, 2024, global system-wide sales totaled nearly $1.2 billion, reflecting an 8% decrease year over year. Excluding the 53rd week in 2023, sales were roughly flat.
In fiscal 2024, global system-wide sales amounted to about $4.9 billion, indicating a 3% decline from 2022 levels. Excluding the additional 53rd week, sales were down approximately 1%.
In North America, comparable sales for the fourth quarter of fiscal 2024 fell by 4% year over year. The downside can be attributed to a fall in both transactions and tickets. During the quarter, comparable sales at North America franchised restaurants and Domestic Company-owned restaurants were down 4% and 6% year over year, respectively. International comparable sales in the fiscal fourth quarter were up 2% year over year.
In fiscal 2024, North America comparable sales were down 4% year over year, courtesy of a 3% fall in transactions and a 1% fall in tickets. International comparable sales in fiscal 2024 were down approximately 1% year over year.
Store Developments
In fiscal 2024, total net unit openings came in at 124, including 81 net unit openings in North America and 43 net unit openings in international markets. Previously, the company anticipated opening 50-60 new restaurants in North America during the fiscal year.
During the year, Papa John's achieved a significant milestone by opening its 6,000th restaurant. The management expressed appreciation for franchise partners' enthusiasm for the brand's growth prospects. It reiterated plans to collaborate with both existing and new franchisees to advance its strategy of expanding in key high-growth markets globally.
Our Thoughts on PZZA Stock
Papa John's recent performance raises concerns about its growth trajectory, as reflected in its declining sales and weakening transaction volumes. Despite efforts under the Back to BETTER 2.0 strategy, the company has struggled to sustain momentum.
While PZZA trades at a forward P/E ratio of 15.64, significantly below the industry average of 24.41, this lower valuation may signal challenges rather than opportunities. Ongoing geopolitical tensions in the Middle East and declining transaction volumes continue to weigh on the company's prospects. Earnings estimates for fiscal 2025 have been revised downward in the past 30 days, reflecting growing skepticism among analysts.