Release Date: February 27, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: How does Papa John's plan to perform relative to the industry in 2025, especially in the back half of the year? A: Todd Penegor, CEO, explained that while the pizza category is expected to be flat to slightly down, Papa John's initiatives such as enhancing the loyalty program, leveraging CRM data, and optimizing marketing spend will help build momentum and potentially gain market share, particularly in transactions. Ravi Thanawala, CFO, added that transaction trends have shown improvement, and efforts are focused on shortening the time between customer transactions and enhancing carryout and aggregator channels.
Q: Can you elaborate on the international growth strategy and market penetration? A: Ravi Thanawala, CFO, highlighted a focus on nine core international markets, which are expected to drive 50% of gross development. These markets are not near saturation, and the company is seeing strong performance in regions like the UK, Middle East, and Latin America. The strategy involves a consumer-centric approach with a robust innovation calendar to drive incremental sales.
Q: What investments are included in the 2025 EBITDA guidance, and how will you balance value and franchise profitability? A: Todd Penegor, CEO, mentioned up to $25 million in marketing investments, including CRM and loyalty enhancements, and a focus on balancing value perception with franchise profitability. Ravi Thanawala, CFO, detailed that the guidance includes marketing investments, a franchisee convention, and performance-based compensation, with a focus on winning consumer consideration and transactions.
Q: What factors will drive ticket improvement throughout the year? A: Todd Penegor, CEO, stated that a return to a traditional barbell pricing strategy and a robust innovation pipeline in the latter half of the year will help manage ticket prices. Strategic pricing and promotional calendar management will also contribute to improving the average ticket size.
Q: How is Papa John's addressing operational simplification and rhythm breakers in stores? A: Todd Penegor, CEO, noted that the company is moving quickly to remove rhythm breakers and focus on core offerings. This includes removing low-performing SKUs and testing menu simplifications during peak promotional times to enhance operational efficiency and pizza quality.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.