By the end of 2014, North America accounted for 71.6% of the total number of Papa John’s International’s (PZZA) restaurants, which include both company and franchise-owned restaurants. But with the North American market becoming more highly competitive, Papa John’s is focusing on strengthening its international business.
Strengthening international presence
Papa John’s is increasing its international presence by focusing on opening new stores outside of North America. In 2014, a total of 388 new stores were opened, 244 of which are outside North America and 144 of which are in North America.
From 2010 to 2014, Papa John’s unit count increased by 27.9%, from 3,646 to 4,663. During the same period, the number of company-owned restaurants grew by 20%, whereas franchise-owned restaurants grew by 29.5%.
Papa John’s unit growth versus peers
From 2010 to 2014, the total number of Papa John’s units increased from 3,546 to 4,663, which represents an increase of 31.5%. During the same period, Domino’s Pizza (DPZ) grew from 9,351 to 11,629, which represents an increase of 24.36%.
By comparison, Pizza Hut, which is owned by YUM! Brands (YUM), increased from 13,432 to 13,601 during the same period. This represents an increase of 1.3%. McDonald’s Corporation (MCD) grew from 32,737 to 36,258, which represents an increase of 10.8%.
Papa John’s International (PZZA) makes up approximately 1.4% of the total portfolio of the PowerShares DWA Consumer Cyclicals Momentum Portfolio (PEZ). PZZA also makes up 2.2% of the PowerShares Dynamic Leisure and Entertainment Portfolio (PEJ) and approximately 2.3% of the PowerShares Dynamic Food & Beverage Portfolio (PBJ).
Not that we’ve discussed Papa John’s main revenue drivers, it’s time to evaluate other factors driving the company’s revenues.