PZZA Issues Q4 Update: Unit Growth Clouded by Soft Sales & Weak Comps

Core Insights - Papa John's International, Inc. reported preliminary results for the fourth quarter and fiscal year 2024, with a scheduled release of detailed results on February 27, 2025 [1] Sales Performance - In the fiscal fourth quarter ending December 29, 2024, global system-wide sales reached nearly $1.2 billion, representing an 8$4.9 billion, indicating a 3% decline from 2022 levels; excluding the additional 53rd week, sales were down approximately 1% [2] North American Market - Comparable sales in North America for the fourth quarter of fiscal 2024 fell by 4% year over year, attributed to declines in both transactions and ticket sizes; franchised restaurants saw a 4% drop, while domestic company-owned restaurants experienced a 6% decline [3] - For fiscal 2024, North America comparable sales were down 4% year over year, driven by a 3% fall in transactions and a 1% fall in ticket sizes [4] International Market - International comparable sales in the fiscal fourth quarter increased by 2% year over year [3] - In fiscal 2024, international comparable sales were down approximately 1% year over year [4] Store Developments - In fiscal 2024, Papa John's achieved a total of 124 net unit openings, including 81 in North America and 43 in international markets; the company had previously anticipated 50-60 new restaurant openings in North America [5] - The company celebrated the opening of its 6,000th restaurant and expressed appreciation for franchise partners' enthusiasm for growth prospects, reiterating plans to expand in key high-growth markets globally [6] Stock Performance and Market Outlook - Papa John's recent performance has raised concerns about its growth trajectory, with declining sales and weakening transaction volumes despite efforts under the Back to BETTER 2.0 strategy [7] - The stock trades at a forward P/E ratio of 15.64, significantly below the industry average of 24.41, which may indicate challenges; earnings estimates for fiscal 2025 have been revised downward, reflecting skepticism among analysts [8] - In the past three months, shares of Papa John's have declined by 27%, compared to a 6% fall in the industry [11]