Papa John’s(PZZA) - 2024 Q3 - Quarterly Results

Financial Performance - Total revenues for Q3 2024 were $506.8 million, a decrease of 3.1% compared to $522.8 million in Q3 2023[4] - Global system-wide restaurant sales were $1.19 billion, reflecting a 3% decline from the prior year quarter[5] - Operating income increased to $65.2 million, up from $31.9 million in the same quarter last year, while adjusted operating income decreased by 12.9% to $29.3 million[6] - Diluted earnings per common share rose to $1.27 from $0.48 in Q3 2023, while adjusted diluted earnings per share fell to $0.43 from $0.53[7] - Net income attributable to the Company for the three months ended September 29, 2024, was $41,808,000, up from $15,861,000, representing a 163% increase[28] - Basic earnings per share rose to $1.28, compared to $0.49 in the same quarter last year, marking a 161% increase[28] - Adjusted net income attributable to common shareholders for the nine months ended September 29, 2024, was $56,086,000, compared to $59,938,000 for the same period in 2023, indicating a decline[24] Sales and Comparable Performance - North America comparable sales decreased by 6% year-over-year, with Domestic Company-owned restaurants down 7% and North America franchised restaurants down 5%[1] - Comparable sales for Domestic Company-owned restaurants declined by 6.7% in Q3 2024, compared to a growth of 5.9% in Q3 2023[8] - Domestic company-owned restaurant sales decreased by 4% to $168,672,000 from $177,195,000 year-over-year[28] Cash Flow and Dividends - Free cash flow for the nine months ended September 29, 2024, was $9.0 million, significantly down from $76.0 million in the prior year period[10] - Cash dividends paid in Q3 2024 amounted to $15.2 million, or $0.46 per common share[12] - The Company declared dividends of $0.46 per common share, consistent with the previous year[28] Restaurant Operations and Openings - The company opened 25 net restaurants in Q3 2024, with expectations of over 100 gross openings in North America and 170 to 190 internationally for the fiscal year[1] - As of September 29, 2024, there were 5,908 Papa John's restaurants operating globally, with a net increase of 25 restaurants during the quarter[9] Costs and Expenses - Total costs and expenses decreased to $441,578,000 from $490,944,000, a reduction of approximately 10%[28] - The Company reported a significant increase in depreciation and amortization expenses to $52,528,000 from $46,815,000, reflecting a 12% increase[29] Assets and Liabilities - Total current assets decreased to $215,857,000 as of September 29, 2024, from $231,018,000 at the end of 2023[27] - Total liabilities decreased to $1,275,557,000 as of September 29, 2024, from $1,317,770,000 at the end of 2023[27] - Cash and cash equivalents decreased to $17,550,000 as of September 29, 2024, from $40,587,000 at the end of 2023[27] Challenges and Risks - The company is facing risks related to labor shortages and increased operating costs due to inflation and supply chain disruptions[18] - Future performance may be impacted by economic conditions and potential delays in new restaurant openings domestically and internationally[18] Other Financial Metrics - Net cash provided by operating activities for the nine months ended September 29, 2024, was $55,884,000, down from $126,936,000 in the prior year[29] - The company incurred international restructuring costs of $19,514,000 for the nine months ended September 29, 2024[24] - Total revenues for the three months ended September 29, 2024, were $506,807,000, a decrease of 3% compared to $522,812,000 for the same period in 2023[28]