For 3Q17, Papa John’s (PZZA) reported revenues of $431.7 million, which is 0.9% higher than the analysts’ estimate of $427.7 million. Compared with 3Q16, the company’s revenue has risen 2.2% YoY (year-over-year).
Papa John’s four revenue sources are as follows:
- domestic company-owned restaurant sales
- North America commissary sales
- royalties and fees collected from domestic franchisees
- international operations
Domestic company-owned restaurants
In 3Q17, the segment posted revenues of $196.3 million, which represents a 1.4% fall from $199.0 million in 3Q17 due to the refranchising of company-owned restaurants. In 3Q17, the company operated 31 fewer company-owned restaurants than in 3Q16. But some of these declines were offset by positive SSSG (same-store sales growth) of 1.7%.
North America commissary
This segment posted revenues of $178.1 million, which represents 4.9% growth over its $169.7 million in 3Q16, driven by increased sales volumes due to the addition of new restaurants and positive SSSG.
This segment generated revenues of $25.6 million, which represents 3.2% growth, compared with $24.8 million in 3Q16. This revenue growth was driven by an increase in the unit count of franchised restaurants by 61 units and positive SSSG of 0.7%.
In 3Q17, this segment’s revenues rose 9.9% YoY to $31.8 million. This revenue growth was driven by the addition of 105 franchised restaurants and positive SSSG growth of 5.3% YoY. But some of the revenue growth was offset by a decline of five company-owned restaurants compared with 3Q16.
Peer comparisons and outlook
For the next four quarters, analysts are expecting Papa John’s to post revenues of $1.84 billion, which represents 5.1% YoY growth over $1.76 billion in 3Q16. This growth is expected to be driven by the addition of new restaurants and positive SSSG.
Next, we’ll take a closer look at Papa John’s 3Q17 SSSG.