Papa John's reports tumbling sales
Papa John’s (PZZA) reported disappointing third-quarter financial results and slightly better-than-anticipated sales in North America.
Same-store sales, a key metric for restaurants, fell less than expected at a 9.8% rate. Analysts were expecting a sales decline of 10.7% for the third quarter.
Earnings were weaker than Wall Street estimates at 20 cents per share versus 22 cents per share that was forecasted.
Papa John’s revenue for the third quarter was also softer than estimated at $364 million, as analysts expected $391 million.
President and CEO Steve Ritchie said in a statement, “During the quarter, we took important actions resulting in improved consumer sentiment and North America comp sales that were slightly ahead of expectations. While the operating environment remains challenging, these early indicators combined with our strong cash flow give us confidence in the consumer initiatives underway across the company.”
The embattled pizza giant has been unable to regain its footing after controversy surrounding former CEO and chairman John Schnatter rocked the company and stock this year. Shares are down 5% so far in 2018 and have fallen 40% from their all-time high.
Papa John’s ousted Schnatter in July and has since been exploring a sale. It was recently reported that private equity firms Bain Capital, CVC Capital Partners, KKR and Roark Capital have been competing to acquire the pizza giant.
Trian Fund Management, an investor in Wendy’s (WEN), has also expressed interest in potentially investing in Papa John’s if a sale deal is not reached.
Shares of Papa John’s fell 1% in after-hours trade on Tuesday.
Heidi Chung is a reporter at Yahoo Finance. Follow her on Twitter: @heidi_chung.
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