Papa Murphy’s, the Vancouver-based maker of take-and-bake pizza, reported third-quarter revenue of $28.1 million, an increase of 26.9 percent compared with last year’s third quarter, in an earnings report released Wednesday.
The company reported net income of $1.1 million, or $0.07 per diluted share. That compared with $1.32 million in last year’s third quarter.
Papa Murphy’s said it opened 23 domestic stores in the quarter, compared with 13 domestic store openings in the third quarter of 2014. It projects that it will have opened about 110 new stores during the entire fiscal year.
Founded in 1981, Papa Murphy’s now operates more than 1,500 franchised and corporate-owned fresh pizza stores in 38 States, Canada and United Arab Emirates. About 1,366 of those stores are in the United States.
The 1.4 percent growth in comparable store sales at its domestic outlets includes a 1.5 growth rate at domestic franchisee-owned stores and flat comparable store sales at company-owned stores. “The level of growth was below our expectations,” Ken Calwell, company president and CEO, said in a conference call.
The company now projects domestic systemwide comparable store sales growth in the range of 2.5 percent to 3 percent for the full fiscal year, down from an earlier projection of at least 3 percent.
The overall lack of growth in comparable store sales at company-owned stores was due in part to the early launch in those stores during last year’s third quarter of a popular new Gourmet DeLites line of pizzas, Calwell said. Those sales created a higher bar for this year’s third quarter at the company-owned stores, he said. However, sales growth was higher than average at stores in less-developed markets, contributing to the overall sales increase.
Calwell said the company is moving forward aggressively with implementation of its digital e-commerce platform, which will allow customers to order from smartphones early next year. He said the technology will give the company a wealth of information about preferences of individual customers, allowing it to more precisely target its marketing.
“We are leaning in and making investments to try to move the business forward and consumers are responding,” Calwell said.
He also noted that the company was building strength in its administrative staff, including the recent hiring of Brandon Solano as chief marketing officer. Solano had been chief marketing officer for Wendy’s International and was previously a vice president at Domino’s Pizza.
Papa Murphy’s shares have climbed 12 percent since the beginning of the year. Its shares closed Wednesday at $12.96, down 4.6 percent for the day but up by 43 percent in the last 12 months.
