Papa John’s (PZZA) posted an EPS (earnings per share) of $0.88 in 4Q16. Removing special items, the adjusted EPS stood at $0.69, which represents a growth of 11.3% from $0.62 in 4Q15.
Revenue growth and share repurchases in the past 12 months offset the fall in EBIT margins. In 2016, the company has repurchased 2.1 million shares for $122.4 million, and after 4Q16, the company plans to repurchase shares worth $7.4 million. As of February 14, 2017, the company had $129.9 million under its share repurchase program.
Remember, share repurchases reduce the number of shares outstanding, thus boosting a company’s EPS. From the above graph, we can see that the company has outperformed analysts’ estimates in all of the previous five quarters.
Peer comparisons and outlook
For 2017, the company management has set the EPS growth guidance to be in the range of 8%–12%. Analysts are expecting the company to post EPS of $2.8, which represents a growth of 9.8%.
Papa John’s announced a dividend of $0.2 for 4Q16, which takes the total for 2016 up to $0.78. The company’s 2016 EPS represents a growth of 16.5% from $0.66 in 2016. In 2017, analysts are expecting the company to pay dividends of $8.4, which represents a growth of 8.4% from $0.78 in 2016.
Continue to the next part for a closer look at Papa John’s valuation multiple.