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· Papa John's reports strong sales, announces management shakeup
· Papa John's turnaround efforts are finally working
Papa John's reports strong sales, announces management shakeup
Heidi Chung, Yahoo Finance
November 6, 2019
Papa John’s (PZZA) reported a beat on the top line and a miss on the bottom line during its third quarter. Same-store sales in the U.S. beat expectations, and the pizza giant reiterated its full-year adjusted EPS guidance. Shares of Papa John’s soared 8% in early trade Wednesday on the news.
Here were the numbers for Papa John’s third quarter, compared to Bloomberg-compiled estimates:
o Revenue: $403.7 million vs. $384.6 million expected
o Earnings per share: 21 cents vs. 22 cents expected
o North America same-store sales: +1% vs. -0.6% expected
o International same-stores sales: +1.6% vs. +1.6% expected
Papa John’s still expects full-year adjusted earnings per share between $1 to $1.20. The company updated its full-year North America same-store sales forecast and now expects growth between -1.5% and -3.5%. It previously anticipated -1% to -4% same-store sales growth in North America. Internationally, the company said same-store sales will be flat to +2% in 2019.
“We are very pleased to have positive comparable sales in North America for the first time in two years. I have spent a large part of my first two months meeting with our franchisees, team members, and other key stakeholders,” CEO Rob Lynch said in a statement. “We are all focused on the right things – reinforcing the quality of our food, improving our unit economics, and promoting a company culture that sets us up to win for years to come. While there is much work to do, we have put in place a clear strategic roadmap to align the interests of our customers, employees, franchisees, and shareholders. Our strategic priorities will guide our path to a brighter future.”
Management shakeup ...
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Papa John's turnaround efforts are finally working
By Danielle Wiener-Bronner, CNN Business
November 6, 2019
New York (CNN Business)For the first time in two years, Papa John's is growing in the United States.
Sales at North American stores open at least a year ticked up 1% in the third quarter, following seven straight quarters of declines. Shares of the company jumped nearly 8% on the news.
CEO Rob Lynch, who stepped into the top role just two months ago, said in a statement on Wednesday he is "very pleased" with the results. He added that "there is much work to do."
The company also announced a series of management changes on Wednesday. Three executives, Chief Operating and Growth Officer Mike Nettles, Chief Marketing Officer Karlin Linhardt and Chief Financial Officer Joe Smith, are all departing the company.
The changes are the latest in a series of steps the company has taken to move on from the scandals caused by its founder John Schnatter.
In November 2017, Schnatter — then CEO and chairman of the board -— was criticized for blaming slowing (but still positive) sales on the NFL leadership's handling of athlete protests. The following summer, after he had stepped down as CEO, it was revealed that he used the N-word on a conference call, sparking his resignation as chairman. Schnatter is still the company's largest shareholder.
To distance itself from the controversial founder, Papa John's (PZZA) has updated its marketing campaign, conducted an internal audit into the company's culture and ran mandatory anti-bias training for employees. It tapped an outsider, Lynch, who was formerly the president of Arby's, to become its new president and CEO. And it hired a new spokesperson, Shaquille O'Neal, as brand ambassador and board member.
To help drive sales, the company has invested in its menu. On Monday, the pizza chain announced the addition of a garlic Parmesan-flavored pizza crust, its first new flavor option for its original dough in 35 years...
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