Papa John's Tumbles on Sales Miss, Tepid Profit Outlookby
Papa John’s International Inc. shares fell the most in seven years after third-quarter sales missed analysts’ estimates and the pizza chain warned that earnings this year will be at the low end of its forecast.
The company posted revenue of $389.3 million for last quarter, short of the $398.4 million predicted on average by analysts. Earnings came in at 45 cents a share in the period, excluding some items. That matched analysts’ projections, according to data compiled by Bloomberg.
Papa John’s, based in Louisville, Kentucky, said that annual earnings per share will probably be near the bottom end of its earlier forecast of $2.04 to $2.10. Analysts have estimated $2.09 on average.
Papa John’s had seen its stock rally 22 percent this year prior to the earnings results, giving it one of the richest valuations in the U.S. restaurant industry. The company has attracted customers by touting natural ingredients and ordering technology -- two things that have also increased its expenses. Higher insurance costs also are a concern, said Peter Saleh, an analyst at BTIG LLC.
The shares fell 12 percent to $59.83 at the close in New York, marking the biggest one-day drop since November 2008.