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Papa John's 1-Q income drops 18%

LOUISVILLE Ky. Papa John’s International Inc. reported an 18-percent drop in first-quarter net income, versus the first quarter of a year ago, as additional costs mostly from increased minimum wages in certain areas of the United States ate into the company’s bottom line.

For the quarter ended April 1, net income totaled $13.2 million, or 43 cents per share, down from year-ago profit of $16 million, or 47 cents per share. Corporate revenues for the latest quarter rose 7.5 percent to $260.6 million, driven mainly by a $15.3 million increase in corporate restaurant revenues from the acquisition of 54 units at the end of 2006.

Domestic systemwide same-store sales increased 0.2 percent, the company reported.

The company’s first-quarter pre-tax income from continuing operations, excluding the results from its consolidated, franchisee-owned cheese-purchasing entity, totaled $21.1 million, up 8.8 percent from the year-earlier, the company reported.

Despite the drop in its net profit in its latest quarter, Papa John’s increased its full-year, per-share earnings expectations to between $1.52 and $1.58, up from previous expectations of between $1.48 per share and $1.56 per share. The company also expects net unit growth of as many as 250 units worldwide in fiscal 2007, and same-store sales growth between 1.5 percent and 2.5 percent over fiscal 2006.

On the company’s first quarter, president and chief executive Nigel Travis said, the Papa John’s system “performed a very competitive category.”

“I am proud of our operators for being the only national pizza company to report positive domestic comp sales during the quarter,” he said.

Papa John’s is parent to about 3,044 namesake pizza restaurants and delivery outlets.

TAGS: Finance
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