Papa John's International, Inc. PZZA announced preliminary first-quarter fiscal 2020 comparable sales. Considering the panoptic impact of coronavirus (COVID-19) pandemic on its business and the industry, the company has withdrawn its fiscal 2020 guidance. The company’s shares surged 7.6% yesterday, after its reported robust preliminary first-quarter 2020 comparable sales. In the past three months, the company’s shares have fell 15%, compared with the industry’s decline of 23.7%.
Preliminary Global Restaurant Sales & Comps
In first-quarter fiscal 2020, the company anticipates domestic company-owned restaurant comps to increase 6.1%.
At North America franchised restaurants, preliminary comps are estimated to be up 5.1%. Further, preliminary comps at system-wide North America restaurants are likely to increase 5.3%. Comps at system-wide international restaurants are expected to improve 2.3%.
Coronavirus Impact on International Market
Notably, the company has nearly 2,100 international franchised stores. It has temporarily closed 350 stores, primarily in Ireland, Peru and the Philippines. Although, the coronavirus impact on China has reduced significantly, the company’s 15 franchise stores are still closed.
Coronavirus Hurts Restaurant Industry’s Traffic
The restaurant industry has been facing declining traffic for quite some time now. We believe the coronavirus outbreak will further hurt traffic and sales in the coming quarters.
Many companies have hinted about business disruptions in the United States, China and across Asia due to the deadly virus spread. The companies have also warned of soft sales trends on account of increased restaurant closures.
Major restaurant companies like Starbucks Corporation SBUX, Yum China Holdings, Inc. YUMC and McDonald's Corporation MCD have also been negatively impacted by this deadly virus.
Papa John's currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Click to get this free report Starbucks Corporation (SBUX) : Free Stock Analysis Report McDonald's Corporation (MCD) : Free Stock Analysis Report Papa John's International, Inc. (PZZA) : Free Stock Analysis Report Yum China Holdings Inc. (YUMC) : Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research