Fifty Papa John's Franchises Close in China Due to  Coronavirus Outbreak

Fifty Papa John's franchises in China closed due to the coronavirus outbreak. The pizza chain said the closings aren't having a material impact now, but the coronavirus could wreak havoc later.
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Papa John’s International  (PZZA) - Get Report shares fell after the pizza chain reported that 50 of its franchised stores have closed in China because of the coronavirus.

Papa John’s also reported better-than-expected fourth-quarter earnings.

As for China, Papa John’s 10-K filing with the Securities and Exchange Commission for 2019 said that while the impact of the closings in China “is not currently material to our results of operations, … there is significant uncertainty relating to the potential effect of coronavirus on our business.”

The risk? “Infections may become more widespread, including to other countries where we have operations, and travel restrictions may remain or worsen, all of which could lead to lower sales, widespread store closures or delays in our supply chain, which could have a negative impact on our business and operating results,” the filing said.

On the earnings front, the Louisville, Ky, company reported adjusted earnings per share of 37 cents, compared with the consensus forecast of 32 cents in a FactSet survey. 

Revenue was $417.5 million, compared with analysts’ expectation of $403.7 million, according to FactSet. The revenue rose 5% from the year-earlier quarter.

And U.S. same-store sales showed growth of 4.1%, compared to analysts’ estimate of 1.9%.

In fourth-quarter 2018, revenue totaled $397.6 million, adjusted earnings per share were 18 cents and U.S. same-store sales dropped 10.2%

At Dec. 29, Papa John’s operated nearly 5,400 restaurants in 49 countries and territories.

In November, the company overhauled its management team, as it sought to recover from the turmoil that led to and followed the resignation of Founder and Chief Executive John Schnatter in 2017.

At last check, Papa John’s shares traded at $64.06, down 5.9%. In the year through Tuesday's close, the stock had surged 61%.