Papa John’s shares jump after earnings beat, new management structure announced

Papa John’s International Inc. shares jumped 3.2% in Wednesday premarket trading after the pizza chain announced third-quarter earnings and sales that beat expectations. Net loss was $3.1 million, or 10 cents per share, after a loss of $13.3 million, or 42 cents per share, last year. Adjusted EPS of 21 cents beat the FactSet consensus for 22 cents per share. Revenue of $403.7 million was up from $385.2 million last year and ahead of the $385.0 million FactSet guidance. North American franchise same-store sales rose 0.6%, domestic company-owned restaurants saw a 2.2% same-store sales increase, and systemwide North American same-store sales rose 1%. The FactSet consensus was for a 0.4% decline in domestic same-store sales. This is the first time the company had same-store sales growth in North America in two years, according to a statement from Chief Executive Rob Lynch. International same-store sales rose 1.6%, ahead of the FactSet guidance for 1.4%. For 2019, Papa John’s expects loss per share of 10 cents to 40 cents, adjusted EPS of $1.00 to $1.20 and North American same-store sales to fall 1% to 4%. Previously, the company expected North American same-store sales to fall 1.5% to 3.5%. FactSet expects domestic same-store sales to fall 2.9%. International same-store sales are expected to be flat to up 3% versus previous guidance for flat to up 2%. FactSet is guiding for 1.9% growth. Papa John’s also announced a new management structure. Jim Norberg has been named chief operating officer for North America. He was previously the chief of restaurant operations. Max Wetzel is joining the company as chief commercial and marketing officer, effective Nov. 18. He was previously the chief transformation officer at PPG Industries. and Jack Swaysland has been named chief operating officer for the international business. Papa John’s Chief Operating and Growth Officer Mike Nettles and the company’s chief marketing officer Karlin Linhardt will leave the company to pursue other opportunities. And Chief Financial Officer Joe Smith will leave in 2020, staying on while the search for a successor takes place. A number of other executives have also been named to the company executive team, including Shane Hutchins, chief supply chain officer, and Marvin Boakye, who has been named chief people and diversity officer. Papa John’s stock has gained 43.7% for the year to date while the S&P 500 index is up 22.7% for the period.

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