Papa John’s International reported total revenue of $507.78m for the second quarter ended 30 June 2024, a decrease of 1.3% from $514.53m in the same period of 2023.
The decline was driven by lower revenue in its North American commissary segment, mainly because of a mix of lower volume and commodity prices.
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For the first half of the year, revenue totalled $1.02bn, down by 1.9%, from $1.04bn in the first half of 2023.
Net income attributable to the company fell to $12.24m in Q2 2024, a decrease of $5.52m, or 31.1%, from $17.76m in the same period of the previous year. In the first half (H1) of 2024, net income dropped to $26.87m, down by $13.26 million, or 33.2%, from $40.14m in H1 2023.
Operating income for the second quarter decreased to $28.22m, a drop of $6.68m, or 19.2%, from $34.91m in Q2 2023. For the six months ending June 30, operating income was $61.94m, down by $10.76m, or 14.8%, compared to $72.70m in the previous year.
Adjusted operating income increased to $38.35m in the second quarter of 2024, up by $1.47m, or 4%, from $36.88m a year earlier.
The rise in adjusted operating income for the second quarter of 2024 was mainly driven by improved margins at its US company-owned restaurants and savings from local marketing efforts. However, these gains were partially offset by $3m in operating losses associated with the UK franchisee acquisition, as well as higher depreciation expenses related to company-owned restaurants and investments in technology platforms.
For the first half of 2024, adjusted operating income was $81.59m, an increase of $5.56m, or 7.3%, compared to $76.03m in the first half of 2023.
In the second quarter of 2024, global system-wide restaurant sales totalled $1.20bn, a decrease of 0.7% from the same period a year earlier after excluding the effects of foreign currency. This decline was mainly attributed to lower comparable sales in North America, somewhat mitigated by a 1.9% increase in global net unit growth over the preceding twelve months.
Comparable sales in North America decreased by 4% year-on-year, with a 4% decline at US company-owned restaurants and a 3% drop at North American franchised restaurants. Meanwhile, international comparable sales remained unchanged from the previous year.
Diluted earnings per share (EPS) for the second quarter were $0.37, a decrease of $0.17, or 31.5%, from $0.54 in Q2 2023. For the first six months, diluted EPS declined to $0.82, down by $0.38, or 31.7%, from $1.20 a year earlier. Adjusted diluted EPS for the second quarter was $0.61, up by $0.02, or 3.4%, from $0.59 in the same quarter of 2023. For H1, adjusted diluted EPS remained unchanged at $1.28.
Q2 saw 31 net unit closures, including 43 company-owned restaurants in the UK, due to planned strategic reductions in international operations.
Papa John’s International’s Q2 2024 net income attributable to the company fell 16.3% from $14.63 in the previous quarter, revenue dropped 1.1% from $513.91 and adjusted operating income declined by 11.3% from $43.24m.
