As the rest of the restaurant industry reels from the impact of COVID-19, pizza chains are coming out on top.
“In May, for the second straight month, Papa John’s team members and franchisees delivered the best sales period in the company’s history,” Papa John’s CEO Rob Lynch said in a statement. “We entered the pandemic with strong growth and momentum, and are fortunate that our delivery and carry-out model has enabled us to meet an essential need for high quality food, safely delivered to consumers’ homes.”
International sales in May rose 7% from 1.4% growth in April. Of Papa John’s 2,100 international franchised stores, roughly 320 are still temporarily closed due to the pandemic.
“Papa John's disclosed another record-setting month in May, with Period 5 domestic comps up 33.5%, implying significant upside to current Street projections and illustrating the continued strength of both the underlying momentum generated by recent product launches and the pandemic's impact on consumers' off-premise usage,” Stifel analyst Chris O’Cull wrote in a note Wednesday. “We believe the company will be able to sustain these guest visits with a robust product innovation pipeline.”
Papa John’s business update follows rival Domino’s Pizza’s (DPZ) update Tuesday. Domino’s said U.S. same-store sales rose 14% in the first two months of the second quarter and 20.9% between April 20 and May 17. Internationally, same-store sales increased 1% during the first two months of the quarter.
“We are seeing a tailwind as consumer behavior across the restaurant industry has shifted toward delivery and carryout, though we are not sure whether this trend will continue for the remainder of the second quarter or how long this tailwind may last,” Domino’s CEO Ritch Allison said in a statement.
As of May 24, less than 900 of its international stores were temporarily closed, according to the company.
Nevertheless, as Papa John’s and Domino’s show resilience even in a challenging environment, Pizza Hut (YUM) continued to struggle. Pizza Hut’s parent company Yum Brands has not released a business update, but according to its first-quarter earnings results, Pizza Hut’s same-store sales plunged 11%.
But don’t count Pizza Hut out just yet, according to Pizza Hut’s interim U.S. President Kevin Hochman. “We want to get back to being America's favorite pizza...We're well on our way on that, we made tremendous progress over the last ten weeks,” Hochman told Yahoo Finance in an interview Tuesday.
“Before you know it, Pizza Hut will be back,” he added.
Shares of Papa John’s soared 20% this year, while Domino’s surged 24% and Yum Brands tumbled 10%. The S&P 500 (^GSPC) sank 6% in the same time period.
Heidi Chung is a reporter at Yahoo Finance. Follow her on Twitter: @heidi_chung.
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