Papa John’s Gains With Demand for Pizza Delivery Holding Strong

(Bloomberg) -- Papa John’s International Inc. reported third-quarter profit that surpassed analysts’ expectations as demand for takeout and delivery stayed strong while the coronavirus pandemic continues to spread. The shares rose.

• The pizza chain reported earnings of 35 cents a share for the period ended Sept. 27. That beat the average estimate for profit of 34 cents. The company had pre-reported comparable sales for the quarter in September.

Key Insights

• Papa John’s said it expects to incur one-time reorganization costs of about $15 million to $20 million related to the planned opening of its new headquarters in Atlanta. As much as $5 million of that will be taken in the fourth quarter. The board also approved a plan to repurchase as much as $75 million of the company’s stock, or about 3% of the shares outstanding.
• Revenue from the online and mobile-ordering businesses increased in the quarter, continuing a trend seen throughout the pandemic. Restaurants have increasingly catered to patrons who want contactless ordering and payment options amid heightened health concerns.
• The company said it has about 1,380 restaurants in its development pipeline, including 180 in North America and 1,200 internationally, most of which are scheduled to open in the next six years.

Market Reaction

• Papa John’s shares rose before regular trading in New York. The stock gained 21% this year through Wednesday’s close.
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