Papa John’s: Update on Ongoing Response to Covid-19

Louisville / KY. (pj) Papa John’s International Inc., one of the world’s largest pizza delivery companies, provided another update on the ongoing business impact of the global coronavirus (COVID-19) pandemic, including preliminary estimated comparable sales information for the May fiscal period. In the spirit of transparency during these uncertain times, the company will continue providing this information on a monthly basis through the June fiscal period, which is the end of the second quarter.

Rob Lynch, President and CEO said, «In May, for the second straight month, Papa John’s team members and franchisees delivered the best sales period in the company’s history. Our teams continue to meet the needs of new and returning customers and their communities, while making health and safety our top priority. We entered the pandemic with strong growth and momentum, and are fortunate that our delivery and carry-out model has enabled us to meet an essential need for high quality food, safely delivered to consumers’ homes. Everyone at Papa John’s takes this responsibility seriously, and is committed to supporting our neighbors in their time of need.

«As states and communities slowly reopen, we continue to show strong performance. The success of ‘No Contact Delivery’ and new products like Papadias – both examples of a new culture of innovation at Papa John’s – continue to drive results. We wish for a speedy recovery and return to normal, and are optimistic about Papa John’s long-term future given the strong foundation that we have continued to build during these challenging times.»

Preliminary Estimated April and May 2020 Fiscal Period Comparable Sales

Preliminary, estimated comparable sales information for the first two fiscal periods of the three months ending June 28, 2020 (Periods 4 and 5 of the fiscal year), relative to the same periods in the prior year are as follows:

Period 4 Period 5
Comparable sales growth (a) 2020-03-30 to 2020-04-26 2020-04-27 to 2020-05-24
Domestic company-owned restaurants 22.0% 28.3%
North America franchised restaurants 28.4% 35.1%
System-wide North America restaurants 26.9% 33.5%
System-wide international restaurants (b) 1.4% 7.0%
(a) Represents the change in year-over-year sales for the same base of restaurants for the same fiscal periods. Comparable sales results for restaurants operating outside of the United States are reported on a constant-dollar basis, which excludes the impact of foreign currency translation.
(b) Includes the impact of temporarily closed stores. Excluding those stores, comparable sales growth for system-wide international restaurants would have been approximately 12% and 15% in Periods 4 and 5, respectively.


Update on Temporary Restaurant Closures as a Result of COVID-19

Of the company’s approximately 2,100 international franchised stores, approximately 320 are temporarily closed, principally in the Middle East (115 stores), Latin America (105 stores) and Europe (90 stores), in accordance with government policies. Some international markets are open predominantly for delivery only, such as in the United Kingdom. In North America, almost all traditional restaurants remain open and fully operational. A number of non-traditional restaurants located in universities and stadiums are temporarily closed; these non-traditional locations are not material to the company’s revenues and operating results.

About Comparable Sales

The Company believes North America and international comparable sales growth information, as defined in the table above, is useful in analyzing its results since franchisees pay royalties and marketing fund contributions that are based on a percentage of franchise sales. Franchise sales also generate commissary revenue in the United States and in certain international markets. Franchise restaurant and comparable sales growth information is also useful for comparison to industry trends and evaluating the strength of our brand. Management believes the presentation of franchise restaurant sales growth, excluding the impact of foreign currency, provides investors with useful information regarding underlying sales trends and the impact of new unit growth without being impacted by swings in the external factor of foreign currency. Franchise restaurant sales are not included in the company’s revenues.