Today, Papa John’s (NASDAQ:PZZA) provided an update on its SSSG (same-store sales growth) for the second quarter. Overall, the company reported that its systemwide SSSG in the North American segment for the April fiscal period rose 26.9%, while the SSSG in the international segment increased by 1.4%. For the May fiscal period, the company’s systemwide SSSG in the North American segment increased by 33.5%, while the international segment reported a rise of 7.0%. The company’s management credited its No Contact Delivery process and the introduction of Papadias for the strong SSSG.
Papa John’s president and CEO, Rob Lynch, said, “We entered the pandemic with strong growth and momentum, and are fortunate that our delivery and carry-out model has enabled us to meet an essential need for high quality food, safely delivered to consumers’ homes. Everyone at Papa John’s takes this responsibility seriously, and is committed to supporting our neighbors in their time of need.”
An update on opening restaurants
Papa John’s management reported that all of its traditional restaurants in North America are open and fully operational. However, restaurants that are located in universities and stadiums are still closed. Management added that these restaurants don’t have a material impact on the company’s operating results. Moving to the international segment, the company added that it has temporarily closed 320 of the 2,100 international restaurants. Among the closed restaurants, 115 are located in the Middle East, 105 in Latin America, and 90 in Europe. Meanwhile, management added that the restaurants that are open in international markets only operate the delivery service.
Papa John’s stock performance
Following the announcement, Papa John’s stock traded in the green in the pre-market trading hours. However, the company fell into the red and was trading 2.2% down at 9:58 AM ET. As of Tuesday’s closing price, Papa John’s stock price has returned 17.5% this year. The stock has outperformed the S&P 500 Index, which has fallen by 7.4%. Meanwhile, Domino’s Pizza (NYSE:DPZ) and Yum! Brands (NYSE:YUM) have returned 22.6% and -12.6% YTD, respectively.
As reported by MarketWatch on April 2, independent restaurants owned a 52% market share in pizza sales. However, amid the COVID-19 outbreak and many states implementing shelter-in place guidelines, most of the restaurants closed their dine-in space and only operated through delivery or takeaway services. Independent restaurants struggle to survive through delivery and takeaway services. So, investors are optimistic that Papa Jonh’s, with its well-established delivery channel, will gain market share from these independent restaurants. The optimism led to a rise in the company’s stock price. On Tuesday, Domino’s provided an update on its SSSG performance in the second quarter. To learn more, read Domino’s Stock Rises on Positive Business Update.