Papa John’s continued on its path to financial recovery following a rough couple of years, with same-store sales in North America increasing a record-breaking 28% and international same-store sales up 5.3% for the second quarter ended June 28, 2020. Despite the industry-wide challenges of the coronavirus pandemic, the Louisville, Ky.-based pizza chain has thrived in the off-premise driven consumer culture over the past several months, with margins and profits at “the highest they have been in several years” and unit closures at their lowest in a decade.
Papa John’s attributed their same-store sales jump during the strong second quarter to both their long-term recovery strategy and to their quick pivoting during the pandemic, including adding three million new digital customers during the second quarter. The company’s success continues to grow into the third quarter, with preliminary same-store sales for July estimated to have increased 30.3% domestically and 13.9% internationally.
Papa John’s president and CEO Rob Lynch emphasized the company’s continued focus on five tenants they committed to at the end of 2019: building a diverse company culture, improving unit economics, establishing product innovation (like their new Shaquille O’Neal-branded extra-large Shaq-a-Roni pizza), expanding their footprint domestically and internationally, and building a stronger technology infrastructure.
“Mobile ordering is our fastest-growing platform as customer ordering and consumption continues to be affected by pandemic,” Lynch said during Thursday’s Q2 earnings call. “This is accelerating our growth […] We currently have robust partnerships with three out of four of the major delivery aggregators and our transactions delivered by delivery partners are up by more than 100% to 5% of our total sales. Papa John’s strategy is to win by providing better pizza wherever our customers are and however they choose to order.”
Moving forward, the main priority for Papa John’s is unit growth.
“Development is my number-one priority right now,” Lynch said. “We’ve built a strong foundation in North America. The next phase of turnaround would be getting development ramped up. We recently added a chief development officer when we previously had not had one. Barring unforeseen circumstances, we are targeting a significant growth in units in 2021. We are building infrastructure right now we’re working to make up for lost ground.”
For the second quarter ended June 28, revenue increased $61 million to $460.6 million, compared with $399.6 million in the same period a year earlier. The company reported net income of $20.6 million or 48 cents per share, up from $8.4 million or 15 cents per share in the same period a year earlier, driven by improved operating sales.
Papa John’s closed a net total of 31 stores systemwide during the second quarter ended June 28, 2020. As of June 28, Papa John’s had 5,347 locations in 48 countries worldwide.
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