Papa John’s (PZZA, $43.15) struggles, but shareholders remain optimistic
Papa John’s International fell short of analysts’ fourth quarter expectations, as same store sales declined by 8.1% in North America. Outside of North America, same-store sales saw smaller declines of 2.6%.
In the fiscal fourth quarter, Papa John’s rocked to a net loss of $13.8 million, or 44 cents per share, from net income of $28.5 million, or 81 cents per share, a year earlier. Net sales fell 20% to $374.0 million versus analyst expectations of $390.1 million. Adjusted earnings per share clocked-in at 15 cents versus an expected 17 cents.
It is alleged that sales suffered after the company’s founder and former CEO, John Schnatter, used a racial slur in a conference call.
Since then the company has been trying to improve its public image. It spent $2.2 million during the fourth quarter — and $5.8 million total during fiscal 2018 — on PR costs. In January, the Papa John’s Foundation gave a $500,000 grant to Bennett College, a struggling historically black college for women.
The company has also launched a new loyalty program that will help boost its sales through analysis of customer data. To encourage customers to join the program, the pizza chain was offering a variety of deals, including free cheese sticks when customers spent more than $12.
Papa John's is also diversifying its offerings with six new specialty pizzas, such as Ultimate Pepperoni and Zesty Italian Trio, as well as the Hot Honey and Chicken Waffles pizza, the winner of a Twitter poll it conducted.
In light of all these upgrades, the company is expecting earnings of $1.00 to $1.20 per share in fiscal 2019. Analysts are also expecting full-year earnings of $1.20 per share. The company also has plans to open 75-100 new stores during 2019.
PZZA in upward trend: price may ascend as a result of having broken its lower Bollinger Band on July 09, 2024
PZZA may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options. In of 34 cases where PZZA's price broke its lower Bollinger Band, its price rose further in the following month. The odds of a continued upward trend are .
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an operator of pizza delivery and restaurants
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