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Sep 24, 2023
Papa John's Q3 2023 Earnings Report
Papa John's financial performance reflected solid system-wide restaurant sales growth, transaction-led North America comp growth, and improving North America restaurant-level margin.
Key Takeaways
Papa John's International, Inc. announced financial results for the third quarter ended September 24, 2023. Key highlights include a 3% increase in North America comparable sales, driven by transaction growth at Domestic Company-owned restaurants and North America franchised restaurants. Global system-wide restaurant sales reached $1.23 billion, a 5% increase from the prior year. Total revenues were $523 million, up 2% from the third quarter a year ago. Operating income increased 64% to $32 million, and diluted earnings per share was $0.48.
North America comparable sales increased by 3% compared to the third quarter of 2022, driven by transaction growth.
Global system-wide restaurant sales grew by 5% year-over-year, reaching $1.23 billion.
Total revenues increased by 2% to $523 million, driven by higher Domestic Company-owned restaurant sales and International revenues.
Operating income increased by 64% to $32 million, reflecting improved North America comparable sales and operational efficiency.
Papa John's
Papa John's
Papa John's Revenue by Segment
Papa John's Revenue by Geographic Location
Revenue by Segment
Domestic Company-owned Restaurants Revenue
CapyFin.comNorth America Franchising Revenue
CapyFin.comNorth America Commissaries Revenue
CapyFin.comInternational Revenue
CapyFin.comRevenue by Geographic Location
International Revenue
CapyFin.com Forward Guidance
Papa John's is increasing its fixed operating margin by 100 basis points in each of the next four years, from 4% in 2023 to 8% in 2027 and will be offering new opportunities for franchisees to earn annual incentive-based rebates as they increase volume and open new restaurants.
Positive Outlook
- Menu innovation
- Revenue management enhancements
- Continued growth in our third-party aggregator channel contributed to our year-over-year sales growth this quarter.
- Strong execution by our teams and franchisees led to solid system-wide restaurant sales growth
- Ability to grow transactions in an ongoing challenging environment, while maintaining average ticket, confirms the strong consumer demand for our product offerings.
Challenges Ahead
- Dilutive impact of recently acquired restaurants in the UK
- Higher variable compensation expense
- Employee benefit costs
- Depreciation expense compared with a year ago
- Lower North America commissary revenues, a result of decreased commodity prices in 2023 compared with 2022
Revenue & Expenses
Visualization of income flow from segment revenue to net income