Papa John’s International Inc. (NASDAQ: PZZA) shares jumped on Tuesday after the company provided a huge update to its business. Effective immediately, Rob Lynch will be replacing Steve Ritchie as president and chief executive of the pizza chain.
Previously, Lynch was president of Arby’s, the second-largest sandwich restaurant brand in the world, with more than 3,400 restaurants across eight countries, where he led the brand’s dramatic turn-around to strong growth and profitability.
Also as president of the Arby’s Franchisee Association since 2013, he rebuilt strong franchisor/franchisee relations, driving the first new restaurant growth in 10 years.
Papa Johns also reaffirmed its most recent annual guidance for earnings in a range of $1.00 to $1.20 per share, North America comparable sales of −1.0% to −4.0%, and International comparable sales of 0.0% to 3.0%. Consensus estimates call for earnings of $1.13 per share and $1.58 billion in revenue for the 2019 full year.
Jeff Smith, chair of the board of directors, commented:
I am thrilled to welcome Rob to Papa John’s at this pivotal moment in the company’s history. His proven record transforming organizations and realizing the growth potential of differentiated brands is ideally suited for Papa John’s as the company sets forth on its next chapter. I would also like to thank Steve Ritchie for his steady leadership as CEO over the past year and a half. Papa John’s is stronger today because of Steve’s good work stabilizing the company, and our business continues to perform on plan. We are all grateful for his dedication and contribution to the company for more than 20 years and wish him success in the future.
Excluding Tuesday’s move, Papa Johns had underperformed the broad markets, with its stock up only 10% year to date. In the past 52 weeks, the stock was up closer to 2.5%.
Shares of Papa Johns traded up about 5% early Tuesday to $46.08, in a 52-week range of $38.29 to $60.56. The consensus price target is $54.43.