Pizza chain says it's still operating in a challenging consumer environment

Papa John's International Inc.'s stock (PZZA) was moving between gains and losses early Thursday, after the pizza chain posted better-than-expected revenue for the third quarter but same-store sales that lagged expectations.

Louisville, Ky.-based Papa John's had net income of $41.8 million, or $1.27 a share, for the quarter, up from $15.861 million, or 48 cents a share, in the year-earlier period.

Adjusted for one-time items including a benefit on the sale of two Quality Control Center properties, EPS came to 43 cents, matching the FactSet consensus.

Revenue fell to $506.8 million from $522.8 million a year ago, but was ahead of the $497.0 million FactSet consensus.

Chief Executive Todd Penegor, who took on the role in August, said the revenue beat came in a challenging consumer environment.

"I joined Papa John's because I could see the potential in this company," Penegor said in prepared remarks. "With our leadership team, we continue to evaluate the business and refine our key strategic initiatives."

North America same-store sales fell 6% from a year ago, as domestic company-owned restaurants were down 7% and North America franchised restaurants were down 5%. The FactSet consensus was for a 4.4% decline.

International same-store sales fell 3%.

Global system-wide restaurant sales fell 3% to $1.19 billion in the quarter, due to lower same-store sales, which were partially offset by 1.67% global net restaurant growth.

The company opened 25 net new restaurants in the period, and North America is on track to meet its goal of more than 100 gross restaurant openings in fiscal 2024. International gross openings are expected to range from 170 to 190 restaurants.

The stock has fallen 23.6% in the year to date, while the S&P500 has gained 24.3%.

-Ciara Linnane

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