Categories AlphaGraphs, Earnings, Retail

Papa John’s Q3 2018 Earnings Preview: A surprise topping this quarter?

Papa John’s (PZZA) is expected to post declining earnings on lower top line when it reports results for the third quarter on Nov 6, 2018, after the closing bell.

The pizza chain is expected to post an 11% fall in quarterly revenue of $384.44 million, pushing the estimated earnings 61.7% down to $0.23 per share. If the estimates are missed, it could mean the stock getting battered. However, there are slight chances of a profit surprise as well.
Unimpressive comp-sales performance, higher costs, and a challenging industry environment are likely to affect Papa John’s earnings on Tuesday.

In the last reported quarter, domestic company-owned restaurant comp sales slumped 6.1% while that of North America franchised restaurants dropped 7.2%. Investors will be on the lookout for this metric, but estimates suggest that the downtrend might continue.

Papa John's North America and International comp sales trend


Weak North America commissary sales have also been a matter of concern for the company for some time, along with higher labor costs due to effects of The Affordable Care Act (Obamacare.)

Lower operating results due to slumping domestic sales, and rising delivery and technology costs are expected to weigh on the adjusted earnings of the Domino’s Pizza (DPZ) rival.

Amidst challenging times the previous quarter, Papa John’s announced its last reported results, failing to meet Street estimates. Along with it, the downward revision of 2018 earnings outlook made the stock take a severe beating plunging more than 10% then.

Last quarter, Revenue slipped 6.2% to $408 million, while earnings plunged 24.6% to $0.49 per share. North American region comp sales fell 6.1%.

Alternatively, Domino’s Pizza posted its earnings less than a month ago, with a 65.3% jump in earnings on a revnue growth of 22.1%.



Pizza Takeover

Last month, reports of activist hedge fund Trian Fund Management considering a takeover of Papa John’s International Inc. (PZZA) emerged. After getting embroiled in a bitter fight with its founder John Schnatter who owns a 30% stake in the company, Papa John’s has been looking for buyers lately.

Trian is not alone as several other entities are said to be interested in buying the pizza chain, but there is no assurance that the hedge fund will make a bid or that a sale will take place. Trian holds a 13% stake in The Wendy’s Company (WEN), and it is said that talks were held between Wendy’s officials and Schnatter earlier this year to discuss a potential deal.

Follow our Google News edition to get the latest stock market, earnings and financial news at your fingertips.

Most Popular

Salesforce stock hit by weak guidance, co-CEO’s exit. What next?

For technology stocks, 2022 has been a challenging year, with companies losing significant market value amid prolonged stock selloff. In that respect, Salesforce, Inc. (NYSE: CRM) is among the worst-affected

Macy’s (M): Here’s a look at the retailer’s expectations for the near term

Shares of Macy’s Inc. (NYSE: M) were down on Thursday. The stock has gained 36% over the past three months and 18% over the past one month. The company’s sales

KR Earnings: Kroger Q3 sales, profit increase and top expectations

Department store chain The Kroger Co. (NYSE: KR) on Thursday said its third-quarter sales and adjusted earnings increased year-over-year. The latest numbers also exceeded the market's expectations. Net earnings attributable to

Add Comment
Viewing Highlight