LOUISVILLE, Ky. - Papa John's International, Inc. (NASDAQ: NASDAQ:PZZA) announced today the continuation of its partnership with PepsiCo (NASDAQ:PEP) as the exclusive beverage supplier for its North American restaurants. The renewed contract, which extends the collaboration for another ten years, aims to provide customers with a variety of popular beverage choices alongside their pizza orders.
The agreement also supports Papa John's marketing initiatives, with PepsiCo contributing additional investment to bolster the pizza chain's promotional efforts. Furthermore, the partnership is expected to incentivize the expansion of Papa John's North American footprint by driving the development of new stores.
Kurt Millburn, Papa John's Chief Supply Chain Officer, emphasized the mutual goal of enhancing the customer dining experience. "Through the extension of our partnership with PepsiCo, Papa John's will continue to offer our valued customers the variety of beverages they have always enjoyed, while driving operational excellence," Millburn stated.
Hugh Roth, Chief Customer Officer at PepsiCo Global Away From Home, expressed enthusiasm about the ongoing relationship with Papa John's. "The perfect pairing of our refreshing beverages with Papa John's delicious pizzas has created a winning combination that continues to delight consumers," Roth remarked.
Customers can expect to find a wide range of PepsiCo beverages, including PEPSI®, MOUNTAIN DEW®, and STARRY®, at Papa John's locations across the country.
Papa John's, known for its commitment to quality ingredients, operates as the world's third-largest pizza delivery company, with approximately 5,900 restaurants in around 50 countries and territories.
PepsiCo, a global food and beverage leader, generated over $91 billion in net revenue in 2023 and continues to focus on sustainable growth and positive change through its pep+ (PepsiCo Positive) strategy.
This announcement is based on a press release statement from Papa John's International, Inc.
In other recent news, Papa John's International, Inc. has seen several developments following the release of its second-quarter 2024 financial results. The pizza chain reported a 3.6% decrease in North American same-store sales for the quarter, a trend that extended to a year-to-date decline of about 6.0%. Despite these figures, Papa John's managed to maintain its operating income amidst the sales challenges.
Piper Sandler and BMO Capital Markets both revised their financial outlooks for the company, lowering the price target from $75.00 to $65.00, while maintaining their Overweight and Outperform ratings, respectively. The new CEO, Todd Penegor, and CFO, Ravi Thanawala, have outlined strategies focused on stabilizing and growing North American sales and improving unit economics.
Internationally, Papa John's saw a 3% rise in comparable sales, excluding the Middle East. The company also reported an adjusted operating income of $38 million for the quarter, a 4% year-over-year increase. As part of its growth strategy, Papa John's plans to open over 100 new restaurants, with a focus on franchisee health and profitability. These are among the recent developments as the company navigates its current challenges.
InvestingPro Insights
As Papa John's International, Inc. (NASDAQ: PZZA) extends its partnership with PepsiCo, the company's financial health and market performance are of particular interest to investors. According to InvestingPro data, Papa John's currently holds a market capitalization of $1.55 billion, indicating its substantial presence in the market. Despite a slight revenue growth of 1.81% over the last twelve months as of Q2 2024, the company experienced a quarterly revenue decline of 1.29% in Q2 2024.
From an earnings perspective, an InvestingPro Tip highlights that 15 analysts have revised their earnings projections downwards for the upcoming period, suggesting potential challenges ahead for the company. This is juxtaposed by an optimistic outlook where analysts predict the company will remain profitable this year, a continuation of its profitability over the last twelve months.
Moreover, the company has demonstrated a commitment to its shareholders by raising its dividend for 3 consecutive years and maintaining dividend payments for 12 consecutive years. The dividend yield stands at an attractive 3.88%, with a growth of 9.52% in the last twelve months as of Q2 2024. However, investors should note that Papa John's is trading at a high P/E ratio of 22.43 relative to near-term earnings growth, which could indicate that the stock is priced optimistically considering its earnings outlook.
Investors who are considering Papa John's as part of their portfolio may want to explore the additional 9 InvestingPro Tips available on the platform, which provide a more comprehensive analysis of the company's financial health and market performance. These insights can be crucial in making informed investment decisions, especially in the volatile landscape of the food and beverage industry.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.