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Papa John’s: What to Expect from Its Q1 Earnings

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Analysts’ expectations

Papa John’s (PZZA) is scheduled to announce its first-quarter earnings after the market closes on May 7. For the first quarter, analysts expect Papa John’s revenues and EPS to fall.

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For the first quarter, analysts expect Papa John’s to post revenues of $385.5 million—a fall of 9.8% from $427.4 million in the first quarter of 2018. The fall in same-store sales and refranchising company-owned restaurants are expected to lower the company’s revenues during the quarter. However, some of the declines are expected to be offset by the net addition of new franchised restaurants.

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Compared to the first quarter of 2018, the company operated 68 fewer company-owned restaurants and 159 more franchised restaurants by the end of 2018. Papa John’s is focusing on menu innovations, enhancing customers’ experience through implementing digital advancements, a delivery service, employee training, and various marketing and promotional programs to drive its sales.

EPS estimates

Analysts expect Papa John’s EPS to fall 52.0% to $0.24 in the first quarter of 2019. The lower revenues and net margins will likely lower the company’s EPS for the quarter. However, share repurchases in the last four quarters are expected to offset some of the declines in the company’s EPS.

During the same quarter, Domino’s Pizza (DPZ) posted EPS growth of 10.0%, whileYum! Brands’ (YUM) EPS fell 8.9%.

Analysts’ recommendations

Among the seven analysts that follow Papa John’s, 71.4% recommended a “buy,” while 28.6% recommended a “hold.” Analysts have given Papa John’s a 12-month target price of $53.33, which represents a return potential of 0.5% from its stock price of $53.06 on May 3.

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