Why Papa John's Shares Got Burned

Before you go, we thought you'd like these...
Before you go close icon

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Papa John's were looking stale today, falling as much as 12% after the pizza chain missed earnings estimates in its quarterly report and restated previous earnings.

So what: Papa John's said it made an adjusted profit of $0.62, below expectations $0.75 and down from a total of $0.65 a year ago. Revenue grew 20% to $367.3 million, topping expectations, as it benefited from an extra week in the calendar year. Comparable sales were up 5.2% in North America and 7% internationally.


Because of an accounting error related to a joint venture, Papa John's said it was forced to restate earnings going back to 2009, which resulted in the net loss of $0.15 per share in past earnings.

Now what:Though the company missed earnings estimates, $0.11 was taken out for the extra calendar week. I wouldn't be too concerned about the problem going forward, as revenue is still growing at a strong pace. The earning restatement is not particularly severe, and the issue seems to be under control now. Today's drop seems exaggerated; investors may want to take advantage of the pullback.

Find out what's next for Papa John's. Add the company to your Watchlist by clicking right here.  

The article Why Papa John's Shares Got Burned originally appeared on Fool.com.

Fool contributor Jeremy Bowman has no position in any stocks mentioned. The Motley Fool owns shares of Papa John's International. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story

Want more news like this?

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

From Our Partners