Papa John’s(US:PZZA)2022-02-24 17:01Financial Data and Key Metrics Changes - Papa John's system-wide sales reached $4.9 billion, up 15.4% in constant currency, with comparable sales increasing by 11.8% in North America and 13% internationally [5][7] - Adjusted EPS reached an all-time high of $3.51 per diluted share, a 150% increase year-over-year [7][35] - Operating income rose over 85% versus 2020, with adjusted operating margins increasing almost 250 basis points [7][32] Business Line Data and Key Metrics Changes - AUVs in North America grew 12% year-over-year, exceeding $1.1 million [6] - Digital sales represented over 75% of domestic sales, up more than 300 basis points from 2020 [12][13] - The company opened 250 net new restaurants in 2021, representing 4.5% unit growth [16] Market Data and Key Metrics Changes - North America comparable sales rose 11.1%, while international comparable sales increased by 2.4% [9] - The company experienced strong demand despite staffing challenges and supply chain issues [20][22] Company Strategy and Development Direction - The company aims to accelerate development from 250 net units in 2021 to between 260 and 300 in 2022 [30][45] - Partnerships with third-party delivery aggregators have been crucial for driving sales and managing labor shortages [14][107] - The focus on premium product innovation and targeted pricing actions is expected to protect margins amid inflation [26][100] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining positive comparable sales growth despite staffing challenges related to Omicron [28][54] - The company anticipates labor market improvements but acknowledges ongoing tightness [22] - The outlook for 2022 remains strong, with expectations for sustained positive comparable sales growth [29][47] Other Important Information - The company received multiple workplace recognitions, including being listed in Forbes' World's Best Employers [24] - Significant capital expenditures were made to enhance long-term growth drivers, including technology and new store development [37][38] Q&A Session Summary Question: Will operating margins hold flat for 2022? - Management believes they can hold margins flat for the full year despite expected headwinds from inflation and staffing challenges [52] Question: How has labor staffing challenges impacted sales trends? - Staffing issues were temporary and driven by Omicron, with confidence in recovering staffing levels [54] Question: Were there delays in restaurant construction due to supply chain issues? - Equipment challenges impacted U.S. company restaurants but did not affect international development [57] Question: What is the outlook for international comp performance? - International comp performance was strong, with two-year stacks comparable to domestic business [58] Question: How is the company managing supply chain and ingredient availability? - The supply chain is functioning well, with no current issues regarding ingredient availability [63] Question: What is the expected growth in domestic unit openings? - The company expects to return to historical levels of domestic unit growth as development agreements are in place [68] Question: How is the company leveraging third-party delivery aggregators? - Partnerships with aggregators have been beneficial for customer acquisition and managing staffing challenges [107] Question: What is the company's strategy for maintaining margins? - The strategy includes leveraging product innovation and pricing power to mitigate inflation impacts [100]