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Papa John's Stock Down On Weak Results

Shares of Papa John's International (PZZA) fell nearly 6 percent on after-hours session on Tuesday after the pizza chain reported a fourth quarter profit that missed analysts estimates, while full-year outlook was also below expectations.

Louisville, Kentucky-based Papa John's fourth-quarter profit dropped to $28.51 million or $0.81 per share from $32.63 million or $0.88 per share last year.

Adjusted earnings for the quarter were $0.65 per share. Analysts polled by Thomson Reuters estimate earnings of $0.67 per share. Analysts' estimates typically exclude special items.

The company's revenues for the quarter grew 6.4% to $467.61 million from $439.62 million last year. Analysts had a consensus revenue estimate of $465.79 million for the quarter.

Looking forward to the full year 2018, the company expects GAAP earnings of $2.40 to $2.60 per share. Analysts currently estimate earnings of $2.90 per share for 2018.

"We know our potential is so much greater than our results, and we are taking significant steps to reinvigorate our record of profitable growth and value creation," said Steve Ritchie, CEO and President of Papa John's. "Based on these initiatives, we expect to see marked improvements in sales later in 2018."

Steve Ritchie took over the reins at Papa John's on January 1, after Papa John's founder John Schnatter resigned as CEO in December, after his controversial remarks about the national anthem protests by NFL players.

Papa John's, a sponsor and advertiser of the NFL, had made comments that the outcry related to NFL players kneeling during the national anthem as well as falling NFL ratings affected its sales. The company added that customers have a negative view of the chain's association with the NFL.

Former San Francisco 49ers quarterback Colin Kaepernick had started the national anthem kneeling movement to show his protest against mistreatment of black people by the police. However, hundreds of more players started kneeling after President Donald Trump urged team owners to fire players who protest during the anthem.

"NFL leadership has hurt Papa John's shareholders. This should have been nipped in the bud a year and a half ago," Schnatter had commented.

PZZA closed Tuesday's trading at $6.36, down $0.91 or 1.59%, on the Nasdaq. The stock further dropped $3.26 or 5.78% in the after-hours trading session.

by RTT Staff Writer

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