USA- Pizza restaurant chain Papa John’s has reported a 1.9% decline in total revenue to US$1.02 billion in H1 2024 from US$1.04 billion reported in H1 2023 amid lower sales volumes and high commodity prices.
Total revenues for Q2 2024 decreased by 1.3% to US$507.78 million from US$514.53 million reported in Q2 2023.
Net income decreased by 31.1% from US$17.76 million recorded in the same quarter last year to US$12.24 million in Q2 2024. In H1 2024, net income decreased by 33.2% to US$26.87 million from US$40.14 million reported in the same half last year.
Papa John’s operating income for Q2 2024 declined to US$28.2 million compared to US$34.91 million reported in the same quarter last year (a 19.2% drop). Operating income for H1 2024 declined by 14.8%, from US$72.7 million recorded in the same half last year to US$61.94 million.
Global system-wide restaurant sales declined by 0.7% to US$1.2 billion in Q2 2024, mostly due to the effects of foreign currency.
Comparable sales in North America also declined by 4% year-on-year (YoY), mostly due to a 3% decline in franchised restaurants. International comparable sales remained unchanged in Q2 2024 compared to the same quarter last year.
However, adjusted operating income increased by 4% in Q2 2024 from US$36.88 million in Q2 2023 to US$38.35 million in Q2 2024.
According to the pizza chain, the increase in adjusted operating income in Q2 2024 is attributed to increased margins in non-franchised outlets in the US as well as savings from localized marketing efforts.
However, these margin gains were offset by US$3 million in operating losses linked to the recent acquisition of Papa John’s UK franchisee.
The company still showed resilience despite these challenges, with adjusted operating income increasing by 7.3% in H1 2024 to US$81.6 million compared to US$76.03 million reported in H1 2023.
The dismal yet resilient performance is a reflection of the current state of the QSR market, which is facing high input and raw material costs translated to commodity prices, leading to a decline in demand. Competitors like McDonald’s and Wendy’s Yum! Brands and other major QSR brands have reported mixed-to-dismal performance.
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