Papa John’s (PZZA) revenue increased 6% from $399 million in 2Q15 to $423 million in 2Q16. Revenue growth was driven by strong same-store sales growth in North America and international markets. The addition of 201 new restaurants in the last 12 months also contributed to revenue growth.
With its focus on providing healthier and cleaner pizza, Papa John’s removed artificial and synthetic ingredients from its food products. The company also started using poultry that’s free of human and animal antibiotics. Also, the company invested $100 million to improve the ingredients used in its food products.
These initiatives appear to have compelled analysts to raise their same-store sales growth estimates and revenue estimates for the next four quarters. Also, the recent signing of an agreement with Orquest Foods could have raised analysts’ confidence.
In the next four quarters, Papa John’s is expected to post revenue of $1.8 billion, which represents year-over-year growth of 6.2%. The new estimates are 1.3% higher than analysts’ earlier estimates.
Revised EPS estimates
After its better-than-estimated 2Q16 earnings, Papa John’s management raised its EPS guidance for fiscal 2016 to $2.35–$2.45 from its earlier guidance of $2.30–$2.40. With EPS of $0.50 and $0.65 expected in 3Q16 and 4Q16, respectively, analysts believe the company could post EPS of $2.45—up 17.5% from fiscal 2015.
Analysts expect the company to post EPS of $0.69 and $0.61 in 1Q17 and 2Q17, which represents year-over-year growth of 10.1% and 6.1%, respectively.