LOUISVILLE, KY. — Consumers concerned about their budgets are not hurting pizza sales at Papa John’s International Inc., but the same cannot be said for the chain’s other items.
“I think more broadly, consumers are coming to Papa Johns right now while they’re doing check management,” said Ravi Thanawala, chief financial officer and interim chief executive officer, in a May 9 earnings call to discuss first-quarter financial results. “They’re buying the things that we are famous for, and that is for our core offerings of pizza and our specialty pizzas. So, we are seeing that the consumer is spending more year-over-year in pizza, and they’re pulling back in sides and beverages. We think that we’re going to continue to test offers that continue to improve that mix.”
In the quarter ended March 31, comparable-store sales in North America declined 1.8%.
“This was primarily due to lower transactions as the continued growth in our aggregator channel was more than offset by a decline in organic delivery while our carryout business remained consistent with the prior year,” Thanawala said. “This shift in channel mix also led to a slightly lower average ticket as a relatively profit neutral revenue from our organic delivery fee decline. Strategic pricing actions by our revenue management team helped to somewhat mitigate this delivery fee impact.”
Comparable-store sales in the International segment declined 2.6%.
“As anticipated, our Middle East region impacted our first-quarter international comparable sales due to the ongoing conflict in this part of the world,” Thanawala said. “Excluding this region, our international comparable sales were up approximately 1% from a year ago.”
Companywide, net income for Louisville-based Papa John’s International was $14.6 million, equal to 45¢ per share on the common stock, which was down 35% from $22.4 million, or 66¢ per share, in the previous year’s first quarter. Total revenues slipped 2% to $514 million from $527 million, largely because of commodity price declines that led to lower revenues in Papa John’s North America commissary segment.