Papa John's expected to stay hot

BTIG analyst Peter Saleh breaks down the Papa John’s (PZZA +2.9%) sales update posted earlier today.

“Following a rapid same-store sales acceleration in April with domestic systemwide comps accelerating to 26.9%, May proved to be even stronger with sales accelerating 33.5%. These figures compare against our initial domestic same-store sales estimate of 17.7% for the quarter,” writes Saleh.

“We expect the company to retain a significant portion of the recent sales gains as these are also driven by the company’s efforts to improve customer relevance and access. In fact, management indicated that they believe the stay-at-home orders added about 10% to sales in April, implying run-rate comps in the upper-teens.”

Saleh also notes that PZZA’s average check grew about 15% in April, with 7% to 10% growth from menu innovation and the rest from loyalty and third-party delivery expansion. The same average check growth is anticipated for May.

BTIG keeps a Buy rating on Papa John’s.

Previously: Comparable sales sizzle at Papa John’s (May 27)


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