Papa John's International Inc (NASDAQ:PZZA) reported a miss on both earnings and revenue in the third quarter because of weaker sales but the company believes initiatives it has taken should lead to a recovery going forward.
The company said EPS came in at $0.20, down 66.7% from the year ago level of $0.60 and the consensus it would reach $0.22. Revenue hit $364 million, below the consensus of $393.68 million and last year's $431.7 million.
The three-quarter figures of the company were also below last year's level. Revenues hit $1.19 billion, from $1.31 billion in the same period a year ago, while EPS was at $1.18, off 41.6% from last year's $2.02.
Same-store sales, a key metric for restaurants, fell less than expected at a 9.8% rate when analysts were expecting a fall of more than 10%.
"While the operating environment remains challenging, these early indicators combined with our strong cash flow give us confidence in the consumer initiatives underway across the company,” said Papa John's president and CEO Steve Ritchie.
Shares of the company were up 2.35% to $54.73, after closing on Tuesday 1.9% lower at $53.47.
The pizza giant has failed to regain its footing after controversy surrounding former CEO and chairman John Schnatter rocked the company and stock in 2018.
Shares are down 5% this year and have dropped 40% from their all-time high.
Papa John’s ousted Schnatter in July and has been exploring a sale. Private equity outfits Bain Capital, CVC Capital Partners, KKR and Roark Capital have been competing to acquire Papa John's. Trian Fund Management, an investor in Wendy’s, has also expressed interest if a sale deal is not reached.
Papa John's is an American restaurant franchise. The company is based in Jeffersontown, Kentucky.
Reporting by Rene Pastor, contactable on rene.pastor@proactiveinvestors.com