Verdict Food Service

Daily Newsletter

07 August 2023

Daily Newsletter

Papa John’s attributable net income drops by 30% in Q2

Global system-wide restaurant sales rose by 2% to $1.22bn.

Papa John’s International has reported an attributable net income of $17.76m for the second quarter (Q2) of 2023, a decline of 30% compared to its $25.43m income a year ago.

For the quarter ended 25 June 2023, the company’s total revenues declined to $514.53m from $522.6m a year earlier.

The company’s operating income declined 10% to $34.91m from $38.90m in Q2 2022.

Papa John’s global system-wide restaurant sales for the latest quarter were $1.22bn, representing an increase of 2% year-on-year.

The company noted that its North American comparable sales declined by 1% compared with the year-ago period.

International comparable sales also fell 1% from a year ago but grew by 5% compared with Q1.

Papa John’s said it opened 47 net new units in Q2, driven by international growth.

The company added that it is on track to open 270 to 310 net new units this year.

Papa John’s International president and CEO Rob Lynch said: “We are pleased with the solid execution that our teams have demonstrated in what continues to be a challenging operating environment.

“Our company restaurants continued their strong performance with positive comp sales growth and year-over-year margin improvement above and beyond the benefits of moderating food costs.

“However, this solid performance was not enough to offset the lower-than-anticipated comps our franchisees experienced during the quarter. That being said, our entire system saw sequential sales improvement throughout the quarter with positive North America comp sales in June.”

Generative AI remains an untapped potential across the consumer industry

GlobalData estimates the total AI market will be worth $909 billion in 2030, growing at a CAGR of 35.2% between 2022 and 2030. The consumer goods, foodservice, and packaging sectors are undergoing digital transformation, accelerated by the COVID-19 pandemic and changing consumer preferences. AI can help companies operating in these sectors by significantly reducing costs and production times. In Nestlé's 2022 full-year results, the company announced a renewed focus on digitalization to drive growth. Financial and reputational pressures associated with supply chain disruptions and sustainability concerns are also driving interest in the digitalization of supply chains. Data science and ML are strong investments across all areas. However, the sectors cannot stop at AI-powered data analytics applications. They must also explore computer vision (CV), smart robots, AI sensors that automate manufacturing and distribution logistics, and generative AI tools that increase efficiency across corporate departments and customer service operations and enable innovation in product design. For the most part, the consumer goods, foodservice, and packaging sectors will not play a significant role in creating and developing AI hardware or platforms. Instead, these sectors will help scale up the adoption of AI technologies, such as CV, conversational platforms, and smart robots. This adoption will be driven by the financial benefits and potential cost savings AI automation delivers across global supply chains.