North American comparable sales forecast falls to 6% to 8%
Papa John’s lowered its full-year sales outlook and suspended its quarterly dividend as the pizza chain’s North American business continues to face a soft consumer environment.
Penegor said Thursday that the company is working to turn around the business, but efforts to improve its supply chains and customer ordering experience are taking longer than anticipated.
The company’s board decided to suspend the quarterly dividend beginning in the third quarter. Penegor said the move will provide greater flexibility to make necessary investments and maintain a strong balance sheet.
Papa John’s now expects global, system-wide restaurant sales to fall between 2% and 4% this year. Its previous forecast called for sales to be flat or down in the low-single-digits.
The company lowered its North American comparable-sales outlook to a 6% to 8% decline, compared with prior guidance for a 2% to 4% decline. Papa John’s also reduced its international comparable-sales forecast to growth of 1% to 3% from 2% to 4%.
Shares fell 6.7%, to $27.75, in premarket trading.
For the three months ended June 28, Papa John’s reported net income of $8.7 million, or 24 cents a share, compared with $9.67 million, or 28 cents a share, in the comparable quarter a year earlier.
Excluding one-time items, earnings were 46 cents a share. Analysts polled by FactSet had expected adjusted earnings of 45 cents a share.
Total revenue fell 8.8% to $482.4 million, roughly in line with Wall Street models.