Papa John’s International, Inc. reported its financial results for the three and nine months ended September 29, 2024, revealing a decline in total revenues but notable improvements in profitability metrics. Total revenues for the third quarter were $506.8 million, down from $522.8 million in the same period of 2023, while revenues for the nine months decreased to $1.53 billion from $1.56 billion year-over-year. The decline in revenue was attributed to lower transaction volumes and comparable sales, particularly in the Domestic Company-owned and North America franchised segments.

Despite the revenue drop, the company achieved significant increases in operating income, which rose to $65.2 million for the third quarter, compared to $31.9 million in the prior year. For the nine months, operating income increased to $127.2 million from $104.6 million. This improvement was bolstered by a pre-tax gain of approximately $41.3 million from the sale of two Quality Control Centers in Texas and Florida.

Net income attributable to the company for the third quarter was $41.8 million, a substantial increase from $15.9 million in the same quarter of 2023. For the nine months, net income rose to $68.7 million from $56.0 million. Basic earnings per share for the third quarter were $1.28, up from $0.49, while diluted earnings per share increased to $1.27 from $0.48.

The company’s balance sheet showed a decrease in total assets to $860.9 million from $875.0 million at the end of 2023, while total liabilities also declined to $1.28 billion from $1.32 billion. Retained earnings increased to $242.3 million, reflecting improved profitability.

Strategically, Papa John’s has been implementing its International Transformation Plan, which includes the closure of underperforming restaurants and refranchising efforts. In the UK, the company closed 43 Company-owned restaurants and refranchised 60 locations, resulting in impairment charges of $10.1 million for the nine months. The company has incurred $21.7 million in restructuring-related costs since the plan's inception, with total pre-tax costs projected between $25 million and $35 million.

The company also reported a decrease in cash and cash equivalents to $17.6 million from $40.6 million at the end of 2023, with net cash provided by operating activities significantly lower at $55.9 million compared to $126.9 million in the prior year. Financing activities included $45.4 million in dividends paid and net repayments on revolving credit facilities totaling $37.2 million.

Overall, while Papa John’s faced challenges in revenue generation, its strategic initiatives and operational efficiencies have led to improved profitability metrics during the reported periods.