LOUISVILLE, Ky.—Pizza delivery company Papa John's International Inc. said Tuesday its first-quarter profit dropped 34 percent due to a charge for the consolidation of a franchisee-owned company and higher costs.
For the quarter ended March 30, net income fell to $8.6 million, or 30 cents per share, from $13.2 million, or 43 cents per share, in the prior-year quarter.
Excluding the effect of the consolidation of the company's franchisee-owned cheese purchasing company, Papa John's said it earned 48 cents per share.
Analysts polled by Thomson Financial expected profit of 44 cents per share.
Restaurant expenses jumped nearly 17 percent with cost of sales, labor and occupancy costs rising substantially. All pizza companies have been forced to pay more for the ingredients, particularly wheat, they need to make their pies.
Revenue rose 11 percent to $289 million from $260.6 million in the first quarter of 2007.
Same-store sales, or sales at locations open at least a year, rose 1.7 percent in the quarter.
Same-store sales is a key indicator of restaurant performance since it measures growth at existing locations rather than newly opened ones.
Papa John's shares fell 2 cents to close at $27.05.
