Papa John's International Inc (NASDAQ:PZZA) shares plummeted 5.35% in pre-market trading on Friday, following the release of its disappointing fourth-quarter 2024 financial results.
The pizza chain reported a 7% year-over-year decline in total revenues to $531 million, while adjusted operating income fell by $10 million to $37 million. The company cited lower domestic sales and higher food costs, particularly for proteins and cheese, as the primary factors behind the weaker performance.
Key factors contributing to the stock's pre-market plunge:
- Global system-wide restaurant sales declined by approximately 8% in constant currency during Q4 2024, primarily due to an additional week of operations in the prior year.
- North America comparable sales dropped 4% in Q4, indicating continued challenges in the domestic market.
- Adjusted operating income margin fell to 7% from 8.3% in 2023, impacted by higher food basket costs.
- The company anticipates pressure on sales and margins to remain in Q1 2025 due to loyalty program enhancements and a value-focused consumer environment.