Papa John's misses quarterly results estimates as living costs soar
Papa John's International, Inc. PZZA | 0.00 | |
McDonald's Corporation MCD | 0.00 |
May 7 (Reuters) - Papa John's International PZZA.O missed expectations for first-quarter revenue and profit on Thursday as the pizza chain failed to draw diners, especially in its U.S. market, at a time when consumers struggle with high living costs.
Shares of the company fell about 4% in premarket trading.
Several U.S. restaurant chains including McDonald's MCD.N and Domino's DPZ.O reported weaker quarterly sales growth, citing a hit to customer spending from soaring gasoline prices driven by the Iran war.
North America comparable sales, which include franchise and company-owned restaurants open for at least a year, fell 6.4% for the third consecutive quarter.
The company is navigating a cautious consumer environment and promotional quick-service restaurant marketplace, CEO Todd Penegor said.
Quarterly revenue fell 7.7% to $478.6 million, compared with analysts' average estimate of $485.7 million, according to data compiled by LSEG.
The company reported adjusted earnings of 32 cents per share, compared with analysts' estimate of 35 cents per share.
It also reiterated its annual forecasts.
The results come amid Irth Capital's offer to pay $47 a share to buy Papa John's International in March, valuing the pizza chain at $1.5 billion, in a second attempt after it tried to buy the pizza chain alongside Apollo Global Management last year, according to a Reuters report.
