The American company Papa John’s International, which owns a chain of pizzerias, reported a fall in net profit and revenue in the second quarter of the current financial year.
According to the company’s financial statements, net profit for the quarter ending 28 June stood at $8.7 million, or $0.24 per share, compared with $9.67 million, or $0.28 per share, for the same period last year.
Adjusted earnings were $0.46 per share, slightly exceeding the consensus forecast of $0.45 from analysts surveyed by FactSet.
Revenue fell by 8.8 per cent to $482.4 million, in line with market expectations.
Like-for-like sales fell by 5.7 per cent. In North America, the figure fell by 8.3 per cent, whilst in the rest of the world it rose by 1.5 per cent.
Papa John’s Board of Directors has decided to suspend the payment of quarterly dividends from the third quarter of this year. When making decisions on capital allocation, management prioritises investment in growth, and the funds that would have been spent on dividends will be channelled into accelerating the transformation, which will enhance shareholder value, the statement said.
The company has also revised its forecast for the current year downwards and now expects a 2–4 per cent decline in like-for-like sales (previously 1–3 per cent), and expects adjusted EBITDA to be in the range of $180–190 million (previous forecast: $200–210 million).
Papa John’s International Inc. shares are down 16.3% during Thursday’s trading session. Since the start of the year, they have fallen by 35.3%.